June 17, 2019 / 1:14 PM / a month ago

UPDATE 1-Russian oil exports via Ust-Luga to fall in Q3 due to contamination

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By Olga Yagova and Gleb Gorodyankin

MOSCOW, June 17 (Reuters) - Third-quarter flows of Urals crude via Russia’s Baltic port of Ust-Luga are set to slide to 2.8 million tonnes from 9 million scheduled for April-June, a plan showed on Monday, a result of contaminated oil crippling infrastructure capacity.

Russia has agreed to take back some of the contaminated oil from the portion if the Druzhba pipeline in Belarus, limiting its capacity to pump oil towards Ust-Luga.

Russian officials have said they prioritised Druzhba routes over other destinations, such as Ust-Luga.

A Russia pipeline, which feeds the Ust-Luga port and Druzhba, has two parallel lines, which normally pump westwards. But now, one of the lines is used to ship contaminated oil back to Russia, slowing down the pipeline and limiting capacity for Ust-Luga as Russia seeks to restore exports via Druzhba in full, two industry sources told Reuters.

Russia’s Surgutneftegaz and Rosneft, were granted quotas to export 620,000 tonnes of crude from Ust-Luga, while 2.18 million tonnes are allocated to Kazakh companies, according to a document signed by Russia’s Energy Ministry and seen by Reuters.

Five million tonnes of oil were contaminated in April with organic chloride. Russia has managed to take out around 2 million tonnes of it from the pipeline system, mostly via the Ust-Luga port.

Exports of Urals oil via Russia’s Baltic Primorsk port are seen rising to 13.1 million tonnes in the third quarter from 10.8 million in the second quarter, according to the document.

Overall Urals exports from Russia’s Baltic ports are set to drop 21 percent in the third quarter of 2019 compared with the second quarter on a daily basis, Reuters calculations showed.

Transneft and the Russian energy ministry did not immediately respond to requests for comments.

DRUZHBA PRIORITY

From July 1 Transneft plans to resume regular quality and volumes on all Druzhba routes.

Urals crude oil exports to via northern Druzhba route to Germany and Poland is set to rise to 9.5 million tonnes in the third quarter from 9.4 million tonnes planned for the second quarter, according to the quarterly schedule.

Russian oil supplies via Druzhba’s southern route to Hungary, Slovakia and Czech Republic will rise to 3.5 million tonnes form 2.8 million.

Crude oil supplies to Belarus are also set at a stable level of 4.7 million tonnes for July-September compared to 4.5 million planned for exports in April-June.

Urals and Siberian Light crude exports via Black Sea’s port of Novorossiisk are seen at 8.7 million tonnes in the third quarter compared to 8.2 million tonnes in April-June.

Azerbaijan crude oil transit via Novorossiisk, which was suspended in March 2019, is planned to be resumed in July, according to the export schedule.

Azerbaijan’s SOCAR will be able to supply 330,000 tonnes of crude via Baku-Novorossiisk pipeline, according to the document. (Reporting by Olga Yagova and Gleb Gorodyankin; editing by David Evans)

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