Serbia:GazmpromNeft and Transnafta on potential JV project of crude oil transport from Romania

9. September 2013. / News Serbia Energy

Romanian crude oil transporter Conpet and Russia’s Gazprom Neft, the oil division of the energy giant by the same name, will start off a feasibility study for the construction of a pipeline from Constanta, Romania, to Pancevo, Serbia, through which Gazprom will transport Russian crude oil to its Serbian refineries, Conpet Director General Liviu Ilasi said Thursday.

‘This is about the pipeline from Constanta to Pancevo, in Serbia, that derives from the bigger Pan European Oil Pipeline Constanta-Pancevo-Trieste. This project is an opportunity for Conpet, Gazprom Neft, Serbia’s Transnafta and Oil Terminal Constanta to cooperate. We have had several meetings this year and we will conduct a feasibility study as well that will highlight costs and benefits,’ said Ilasi.

Gazprom Neft owns in Serbia the local oil company NIS, which has two refineries, one each in Pancevo and Novi Sad.

Currently, there are oil pipelines from Constanta to Pitesti, both in Romania, while the project to be carried out with the Russian companies would mean adding 324 more km to the pipeline to reach Pancevo from Pitesti, nearly 280 km of which will cross Romania. The capacity of the oil pipeline could reach 7.5 million tonnes a year.

‘We are actually interconnecting the crude oil transport systems of Romania and Serbia. Our relation with the Serbian partners is excellent and there are shared interests. We still need the okay from Gazprom Neft, the owner of the Pancevo refinery to start off the project. To us, this is both an opportunity and a necessity. If the feasibility study starts this year, the pipeline could be ready in two years’ time,’ said Ilasi.

He added that this way the crude oil will be moved from Serbia via a much shorter route that entails smaller costs and provides higher security. The oil will come loaded on Russian oil tanks via the Black Sea to Constanta, where it will be fed into the Conpet pipelines at the Oil Terminal.

Ilasi mentioned that the total investment in this project should exceed 200 million euros.

Asked whether Gazprom could win the majority stake in this project, he answered in the affirmative. ‘Yes, this would not be excluded and that would not bother us.’

The last conversation to date with Gazprom was held on July 3 in Ploiesti.

‘Analyses will be conducted in the period immediately ahead, than we will exchange information and have a meeting this September,’ added Ilasi.

He said there is interest on the part of oil companies from Kazakhstan and Azerbaijan in the pipeline going from Constanta to the rest of Europe.

‘In the next years, there will be huge quantities of crude oil from Kazakhstan, but transport via the Bosporus entails many risks. The best thing would be pipelines from Constanta to Central Europe. Kazakhstan has said that when there is capacity in the pipelines it will fill them up immediately. Azeri SOCAR is also interested in brining crude oil to Romania. So there is interest, there are intentions and the problem is whether or not they will materialise, and if so how soon,’ said the Conpet official. He added that discussions are still needed in this regard at the level of several European Union member states.

Source; Serbia Energy See desk

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