Transneft May Get Interim Tariff Increase
OREANDA-NEWS. July 07, 2010. Federal Tariff Service plans to increase Transneft’s tariffs by about 3%, on average, from 1 August 2010. In addition, Transneft should get an extra 10% increase from 1 December 2010. The proposed measure is aimed at helping Transneft finance its ongoing large-scale investment projects, which include the second stage of the ESPO pipeline (from Skovorodino to Kozmino), Phase 2 of the Baltic pipeline system (from central Russia to the port of Primorsk), and construction the new Purpe-Samotlor pipeline in Western Siberia, reported the press-centre of OTKRITIE Financial Corporation.
View: The news is positive for Transneft, since the company should receive additional revenue to the tune of USD0.3bn in 2010 and USD1.3bn next year as a result of the proposed tariff hike.
Rating: We maintain our BUY rating on Transneft preferred shares with a target price of USD1,086/share.