Russia will decide within a month whether to build a new oil-export link to the Baltic port of Primorsk, bypassing Belarus, after a dispute between the neighbors disrupted supplies to some European refineries.
The new link will have to be built „very quickly” following a government decision on the project that's expected „within a month,” Semyon Vainshtok, president of OAO Transneft, Russia's state-controlled pipeline company, told the IP-Week conference in London today.
Transneft will cut oil shipping prices to Primorsk, making the route competitive with the Druzhba pipeline, which crosses Belarus, Vainshtok said. Oil companies will be allowed to choose which export route to use, he said. Transneft cut supplies to Belarus for three days last month after Russia's western neighbor demanded a transit fee for crude, causing shortfalls to refineries in central Europe.
„The transit risks for Russian oil are increasing,” Vainshtok said. „If the decision is made it will only be to protect the interests of our western partners.” The new pipeline will be able to carry 50 million tons of crude annually, or about two-thirds of Primorsk's current capacity, from Unecha, near Russia's border with Belarus, to the port.
It may eventually be expanded to the same size as the Druzhba pipeline, which crosses Belarus, the company said. Transneft depends on the Druzhba, or „friendship” pipeline, for about a third of its export capacity, shipping about 83 million tons of Russian and Central Asian crude to Europe a year. (Bloomberg)