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. Last Updated: 07/27/2016

Neste Opens Fuel Storage Terminal on Gulf Coast

ST. PETERSBURG -- Nearly a decade after they entered the St. Petersburg market, Finnish oil company Neste has opened its own gas and diesel storage terminal.

The $30 million terminal, which is located on the coast of the Gulf of Finland some 50 kilometers west of St. Petersburg, has a total storage capacity of 31,000 cubic meters.

For the moment, Neste will bring gas and diesel to the terminal by rail, but a sea route connecting the terminal with Finland is also planned, company officials said after the facility was opened last Friday.

Neste operates a network of 23 gas and diesel stations in St. Petersburg and in the Leningrad region that surrounds but does not include Russia's second city. The Finnish firm also supplies its products to gas stations outside of its own network.

Neste sells its own high octane gasoline brands, imported from Finland, as well as fuel bought at local refineries.

The new terminal will strengthen Neste's position after nearly 10 years of operations, analysts said.

Previously Neste, a subsidiary of the Finnish energy company Fortum Oil & Gas, had used facilities owned by the St. Petersburg fuel company PTK to store its products.

Neste officials say the terminal - with an annual capacity of 500,000 metric tons - is big enough to cover the company's operations in both the retail and wholesale sectors.

Veli-Matti Ropponen, president of Fortum Oil & Gas, said Neste is not going to lease the facilities of the new terminal to other operators, but will supply them with imported products.

Among its prospective customers are local fuel companies such as Shell-AZS, which is part of international group Royal Dutch-Shell and operates five gas stations in St. Petersburg.

Alexander Utkin, a spokesman for Shell-AZS, confirmed the negotiations with Neste but said no decision had been made on whether his company would buy fuel from the new terminal.

One of the biggest fuel market players in St. Petersburg and the Leningrad region, Neste attracted the attention of criminal groups in the early 1990s, according to Finnish press reports.

Earlier this year, Helsinki-based newspaper Helsingin Sanomat reported that Neste had made huge efforts to free itself of the influence of the Tambovskaya mafia group throughout the 1990s, resulting in the murders of two high placed Neste employees at its St. Petersburg branch in 1997.

Ropponen declined to comment on the murders, saying only that the business environment in Russia is more difficult than in Finland.

Ropponen said Fortum's strategy in Finland and the Baltic states has been to use their own terminals.

The new terminal, which is more modern than other local storage facilities - all built a decade or more ago - is likely to make the company more independent from its local partners. The company will reduce its operations with PTK, whose oil storage terminal, Ruchyi, Neste had been using.