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. Last Updated: 07/27/2016

Transneft Says It's Ready to Ship More Oil

Pipeline monopoly Transneft said Wednesday that it was ready to implement the government's decision to boost oil exports by 150,000 barrels per day from July and extend its capacity further in 2003.

Transneft head Semyon Vainshtok told reporters the company, currently shipping up to 3 million bpd of Russian and transit crude, would boost export capacities by 300,000 bpd next year in response to the country's booming output.

Russia, the world's second-largest oil exporter, agreed to curb its January-June exports by around 5 percent to help the Organization of the Petroleum Exporting Countries prop up world oil prices, but effectively ditched the pact several months ago and is already pumping at almost full capacity.

On Tuesday, Russia said it would abandon the deal and would boost supplies by 150,000 bpd in July to September. Unlike Russia, OPEC agreed on Wednesday to keep tough oil output limits in place for another three months.

"We will, of course, implement the government's decision to increase exports in the third quarter. ... Next year we are able to implement at least three projects that would give us a total increase of about 16 million tons," Vainshtok said.

Those projects will include the extension of Primorsk terminal on the Gulf of Finland, deliveries of Russian crude to Iran and the first supplies to the Croatian Adriatic port of Omisalj, he said.

Vainshtok said Transneft had definitely agreed with its peers in Ukraine, Hungary, Slovakia and Croatia on tariff fees of $0.64 per ton per 100 kilometers to ship up to 5 million tons per year of crude to the port of Omisalj.

"Transneft has done its job, now it is time for the foreign ministries and government commissions of the five states to finalize those agreements," he said.

Russian oil firms have long encouraged Transneft to launch the plan, which would allow Russian crude to bypass the Black Sea and Turkey's Bosporus for the first time.

Omisalj's ability to load supertankers and Russia's desire to supply more crude to the United States have added weight to the idea. But it had long been blocked by the Ukrainian and Hungarian pipeline monopolies.

Vainshtok said all problems had been solved and Croatian pipeline firm Janaf was already building crude oil storage in Omasalj as it wanted the port not only to export Russian crude but also to retain import capacities.

He said apart from Omisalj, Transneft planned to export more crude from the northern Primorsk terminal after it upgrades its capacities to 18 million tons from the current 12 million.