Gazprom Neft to Sign Deal For Terminal to Ship New Arctic Oil

Reuters
Total Views: 3
December 4, 2013

Image (c) Gazprom

reuters_logo1MOSCOW, Dec 4 (Reuters) – Russia’s Gazprom Neft plans to sign a deal on Thursday to build a terminal to ship oil from its new Novoportovskoye Arctic field to feed Europe, sources familiar with the matter told Reuters.

Novoportovskoye is one of the biggest fields in the Russian Arctic and is seen by the country as crucial to maintaining production growth in the face of depleting West Siberian deposits.

Gazprom Neft, an oil arm of Russian state gas company Gazprom, is due to sign the deal with Rosmorport, a special state company in charge of building ports, and the state watchdog overseeing sea and river transport in Russia.

One of the sources said that the new Kara Sea terminal, to be linked to the field by a 100km pipeline, would have annual capacity of 170,000 bpd. The second source added that the new port is expected to be built by 2016.

The company declined to comment on the proposed deal, but it has said that Novoportovskoye is expected to begin commercial production next year, initially 8,000 to 10,000 barrels per day (bpd), increasing to between 120,000 and 180,000 bpd by 2020.

The relatively high volumes of the field’s light low-sulphur oil could also allow the creation of a new oil grade to feed refineries in northwest Europe, the company said in its corporate magazine last month.

Alternatively, oil could be shipped to Asia, though this could only be done over short periods because of difficulties navigating through winter ice.

Oil from Novoportovskoye has all that is needed to become “a good grade”, Raiffeisenbank analyst Andrey Polischuk said on Wednesday, citing its API gravity – which shows how heavy the oil is compared with water – of 33-35 and sulphur content of 0.1 percent.

Russia’s main export oil, Urals, is a mix of different grades produced in the West Siberia and Volga-Urals regions with sulphur content of more than 1 percent.

“Under all characteristics Novoport looks like a light low-sulphur oil of high quality,” Polischuk said. “It could possibly trade at a premium to Urals.”

Urals oil is trading at about $112 a barrel.

The new field is key to Gazprom Neft achieving its previously stated target of doubling output to 100 million tonnes (2 million bpd) by 2020. (Reporting by Denis Pinchuk and Katya Golubkova; Editing by David Goodman)

© 2013 Thomson Reuters. All rights reserved.

Tags:

Back to Main