OREANDA-NEWS. November 19, 2012. TRANSNEFT is ready to involve a reserve oil pipeline from Tikhoretsk to Novorossijsk for the “Yug” project, which presupposes building of an oil product pipeline for export. TRANSNEFT doesn’t use this reserve oil pipeline for pumping oil to Novorossijsk port, as the Company has another extra branch of a larger diameter. With this regard, the transporting monopoly may rearrange the section of 300 km length for a new project for transportation of oil products for export, in case if a decision on building of the oil product pipeline till Novorossijsk is made. The final destination point of the “Yug” project is not confirmed yet, and there are two variants for consideration: till Novorossijsk or till Tuapse.

TRANSNEFT underlines that the sources of financing the project are not determined yet, and for the moment, all the current expenses of “Transnefteprodukt” for the system’s servicing are covered from TRANSNEFT’s own funds. “Up to 50 per cent of current expenses of “Transnefteprodukt” for the system’s servicing are covered from the own funds of TRANSNEFT parent company, at the total volume of current expenses amounting 14 billion RUR”, the company reported. The official representative of TRANSNEFT Company noticed that regulation of the tariff for transportation of oil products in the context of railway tariffs significantly influences realization of new investment projects by “Transnefteproduct”, including the “Yug” project. Herewith he emphasized that for the moment, while Government decree N980 (concerning a fixed tariff for oil products transportation in amount of 70 per cent from the price of oil products transportation by railway) is in force, realization of the “Yug” investment project in not economically approved, as it doesn’t result in finding sources for financing this project. Moreover, the representative of the Company remembered that the total price of the “Yug” project depends on the final destination point of the oil product pipeline (Novorossijsk or Tuapse) and varies from 92 to 120 billion RUR. To prove such investments, it is necessary to change the approaches to forming the tariff for oil pumping, TRANSNEFT believes.

TRANSNEFT doesn’t have any clear guarantees from manufacturers for pumping oil products yet. It is supposed that the volume of pumping shall amount 8.7 million tons per year. Nevertheless, the project’s indices are rather sensible for changing of pumping volumes; at that, considering even maximum volumes of pumping, the index of net price value (NPV) of the project has a negative mark.