Transneft exec says sure of quality, quantity of Urals exports
MOSCOW, Nov 3 (PRIME) -- Russian oil pipeline monopoly Transneft is sure that the quality and quantity of exports of the Urals oil blend will be maintained, Vice President Sergei Andronov said in an interview to a corporate magazine published on Friday.
In 2015, oil major Lukoil CEO Vagit Alekperov said that traditional buyers of Russia’s Urals oil blend, Hungary’s MOL and Finland’s Neste, complained of falling quality. Andronov said then that the quality may fall even further.
Later Transneft suggested creation of a separate flow of sour crude exports, but sour crude producers Bashneft and Tatneft opposed the idea. First Deputy Energy Minister Alexei Teksler said there was no threat of the Urals quality falling before 2018. In March 2017, Teksler said that the quality of the Urals oil is under control and creation of a separate export flow was delayed until after 2018.
“The company is sure that the quality and volumes of oil will be maintained. Regarding the forecast of maintained relative quantity of the Urals blend, we see no fast changes. The amount of oil exported through Primorsk will stay at the level of 43–45 million tonnes a year. This is a planned figure that is based on requests of oil companies,” Andronov said.
Under futures contracts, the density of Urals oil amounts to up to 80 kilograms per cubic meter with the sulfur content of no more than 1.8%. “We see no significant risks here that may impact the figures. Assuming this, the company guarantees consistent flows of the Urals blend to the port of Primorsk and other Russian ports that export this blend of oil,” the company said.
The Urals oil price is tied to the Brent oil price and is about 5% cheaper than Brent. About 2.5 percentage points of the difference is a premium for liquidity that Brent gets as an exchange instrument. These 2.5 percentage points transform into about U.S. $2.5 billion additional oil export revenue, meaning it is important for Russia to create the Urals price benchmark, and the quality of the oil is vital here, Transneft said.
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