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. Last Updated: 07/27/2016

Transneft Plans to Boost Oil Exports 16% in 2003

National oil pipeline operator Transneft said Wednesday that it plans to increase exports by at least 16 percent this year by boosting the capacity of its gridlocked network and ports, a move that could help Russia gain global market share even as OPEC mulls output hikes.

"We are increasing exports all the time. There has been a constant growth in export capacity of 10 percent over the past few years," Transneft vice president Sergei Grigoriyev said.

He said the pipeline monopoly intends to boost capacity at the major Black Sea port of Novorossiisk in 2003 by several million metric tons a year.

Transneft is waiting for the go-ahead from the government to add another 18 million tons of capacity to the Baltic Pipeline System, which was launched last year with an initial ability to handle 12 million tons annually, he said. Improvements to the Druzhba pipeline to the Adriatic Sea would boost capacity by another 5 million tons, he said.

"That totals an addition of 25 million tons per year. This is the minimum increase we can make," he said, adding that upgrading both systems depends on government approval. Otherwise, he said, the hike in capacity might be delayed until 2004.

His comments came as Energy Minister Igor Yusufov vowed Wednesday that Russia will boost output this year in line with OPEC plans to hike production and keep a lid on oil prices, which have skyrocketed ahead of an expected war in Iraq and amid a crippling oil industry strike in Venezuela.

"We have reached a conclusion to increase output in order to stabilize prices to the level agreed by OPEC," Yusufov said following a meeting with Iran's oil minister, Reuters reported.

OPEC members on Wednesday called for an emergency meeting for this weekend to decide how much more to pump to keep the price within its target range of $22 to $28 per barrel. Prices have hovered around $30 per barrel for more than six months and have climbed 25 percent in the past eight weeks.

Yusufov said Monday that Russia would cooperate with OPEC to stabilize the market.

OPEC members have said output could be increased by 1 million to 1.5 million barrels per day, an increase of 4 percent to 7 percent.

Analysts said Wednesday that even though Russia is not able to hike output as quickly as OPEC members, it could still boost exports significantly.

"Russia's biggest interest is to maximize exports," said Kaha Kiknavelidze of Troika Dialog. "The oil price is not the most important thing for Russia.

"The main question is whether Transneft can increase export capacity. There is no doubt over whether oil majors can increase production," he said.

Oil majors have already announced plans to further boost production this year, continuing last year's overall growth of 9 percent, which allowed Russia to briefly overtake Saudi Arabia as the world's largest producer.

Analysts, however, warned of a price collapse if OPEC and Russia flooded the market.