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7 Questions: Nikolay Tokarev, President of Transneft

On Tuesday, Transneft President Nikolay Tokarev took part in the security meeting of the Company’s Expert Board. Following this event, he answered a number of questions asked by journalists.

7 Questions: Nikolay Tokarev, President of Transneft

On Tuesday July 19, 2016, Transneft President Nikolay Tokarev took part in the security meeting of the Company’s Expert Board. Following this event, he answered a number of questions asked by journalists.

1. On oil export forecast

Mr Tokarev informed that crude export from Russia in 2016 will remain at the level of 2015. «I believe the export volumes will be close to those in the previous year,» he said, answering the question about the projected export supplies of the Russian crude this year.

2. On launching the Zapolyarye – Purpe oil pipeline

Crude is available for filling the Zapolyarye – Purpe oil trunk pipeline, whose commissioning is scheduled for November 2016.

«Now the pipeline filling is being completed and in November we plan to launch the pipeline operation,» said Mr Tokarev who added that the pipeline would not reach the full planned capacity yet, as it had been planned before.

Commenting on the Rosneft plans to cut crude supplies to the pipeline, Nikolay Tokarev said that this would cause damage to the project at large, including to Transneft. The Company continues counting its financial losses from pushing back the deadlines and contracting the volumes of crude to be supplied by Rosneft for the Zapolyarye – Purpe oil pipeline. Mr Tokarev noted that meetings to this effect were held in the government, the Ministry of Energy, and the Government Commission for the Fuel and Energy Complex. Transneft President also emphasized that the Company reserves the right to seek redress and to harness all mechanisms, including the legal ones, for addressing the given problem.

3. On the events involving Bosporus Strait

Transneft is capable of engaging the surplus capacity on the western direction in no time, in case the Turkish authorities close the Bosporus Strait, informed Mr Tokarev.

He pointed out that the surplus capacity on the western direction is capable of redistributing the entire freight flow from Bosporus Strait to new routes on a rather tight deadline.

Transneft President noted that he sees no serious risks in this area. «In case of a serious collision in the straits, we are ready to engage this surplus capacity,» he added. The Company preventively figured out its own potential, having analysed the required engineering arrangements and timelines. Nikolay Tokarev informed that in the given context Russian petroleum companies run no risks.

4. On the prospects of the Burgas – Alexandroupolis project

The construction of the oil pipeline project Burgas – Alexandroupolis can be restarted in case if any problems with using the Black Sea straits emerge, stated Mr Tokarev at his meeting with journalists.

Talking about the possible new projects in circumvention of the Black Sea straits, including the Burgas – Alexandroupolis project, he noted that the Bulgarian partners «pleasantly surprised us» in this respect. Transneft has recently received an official notice that the Bulgarian side stands up for preservation of the Burgas – Alexandroupolis project and against the dissolution of the earlier «mothballed» management company.

«The project has not been discarded. Essentially, it has been developed and if needed it could be taken off the shelf and restarted. This is one of the options,» emphasized Mr Tokarev.

The management company of the Burgas – Alexandroupolis project is still financed. Nikolay Tokarev reminded that Transneft, to avoid unnecessary financial outlay, had earlier initiated the termination of this company’s activities, because the project had no prospects. «As soon as this initiative became practically feasible, our Bulgarian partners notified us that they would rather prefer to preserve the company and to engage in its operations,» he clarified.

5. On the possible placement of bonds

Mr Tokarev also informed that Transneft does not rule out a new placement of bonds this year, if need be.

«On the whole, there was a 250-billion-rouble corridor. If necessary, we’ll certainly do this,» he said, answering the question about the possible placement of bonds.

6. On the prospects of using Gruzovaya station

The owners of Port Vostochny showed interest in using the railway station Gruzovaya (operated by Vostokneftetrans, a joint venture of Transneft and Uralvagonzavod), informed Mr Tokarev.

He pointed out that at the present time discussions are under way with Russian Railways which is interested in the given station, since the company is implementing an investment programme in the region. The task of cutting the costs of implementing the investment programme could provide an opportunity for using Gruzovaya station.

However, Mr Tokarev added that other market players are also interested in this station. «The owners of nearby Port Vostochny are also interested: in case the railroad could be extended by a couple of kilometres to the shoreline, Port Vostochny could be engaged in this scheme,» said Transneft President, noting that there are many options and all of them are being discussed by many parties concerned, each putting forward its own proposals.

7. On crude supplies via Port Makhachkala

Nikolay Tokarev also told the journalists that crude freight flows via Port Makhachkala are rebounding.

«Today it can already be stated that the freight flow via Port Makhachkala is generally rebounding. Let’s hope that this situation would become stable and irreversible and the constructive approach would prevail,» he said.


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