Page 9 - FSUOGM Week 40 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russian oil firms eye rail option

for Asia-Pacific oil exports

RUSSIA RUSSIAN oil majors are transporting their The ESPO-2 pipeline was completed in 2015,
crude eastwards via rail for the first time since enabling Russia to significantly expand oil ship-
Gazprom Neft is 2016, in order to ship cargoes from the Far East ments to Asia-Pacific markets. It connects with
trialling the delivery of to Asia-Pacific markets against a backdrop of the 80mn tonne per year (1.6mn barrels per
oil eastwards using rail. an approaching EU embargo on the majority of day) ESPO-1 pipeline in Irkutsk. ESPO-2 has
Russian oil purchases, Argus reported this week. a capacity of 800,000 bpd, and runs all the way
Citing market sources, Argus said that Gaz- to the Far East. Another 600,000 bpd spur runs
prom Neft had delivered a trial batch of oil at from Skovoridino to China, while about 200,000
the end of September to the Far Eastern port of bpd is used at the Komsomolsk and Kharabovsk
Kozmino. This route has not been used since the refineries in the Far East.
launch of the Eastern Siberia – Pacific Ocean Transporting crude via pipeline is signifi-
pipeline 2 (ESPO-2). That pipeline is now oper- cantly cheaper than by rail. Meanwhile, incom-
ating at full capacity. ing EU sanctions are set to significantly increase
According to Argus, delivering oil via rail the cost of tanker charters and cargo insurance
to the Far East could cause problems for coal for Russian oil companies. As a result, it is poten-
shipments, which have likewise been diverted tially more profitable to deliver oil via rail to the
eastwards following the introduction of an EU Far East and then load it onto a tanker there,
embargo earlier this year. rather than shipping it on a tanker all the way
The EU is set to impose a ban on all seaborne from the ports on the Baltic Sea. Argus estimates
Russian oil cargoes in December, and extend this that the amount of oil that could be delivered via
to petroleum products six months later. Accord- the rail option could reach 140,000 bpd. But the
ing to Argus, Transneft delivered the 4,400- Moscow-based Kommersant newspaper cau-
tonne Gazprom Neft cargo to Kozmino from tions that there may not be enough rail tankers
the Irkutsk region. to handle the supplies. ™

Week 40 06•October•2022 www. NEWSBASE .com P9