Russian oil to Belarus dries up, talks resume

Russian oil flows to Belarus slowed to a trickle over the weekend ahead of the resumption of talks to settle a pricing dispute and avoid a full stoppage.

Russian oil to Belarus dries up, talks resume

Russian oil flows to Belarus slowed to a trickle over the weekend ahead of the resumption of talks on Monday to settle a pricing dispute and avoid a full stoppage that could affect supplies to Europe.

Russian oil pipeline monopoly Transneft delivered about 15,000 tonnes of crude to Belarussian oil refineries between Friday and Sunday, compared with a quarterly schedule of around 50,000 tonnes per day, industry sources said.

"Oil supplies to the Mozyr refinery fell to zero, while supplies to Polotsk totalled some 6,000 tonnes on Sunday," one industry source told Reuters. Polotsk is another name for the Naftan refinery, one of only two refineries in Belarus.

Transneft was scheduled to ship 1.2 million tonnes to Belarus in the first 24 days of January, but actual supplies were much lower, at around 592,000 tonnes, the sources said.

Transneft's initial first-quarter supply schedule showed that Russia was expected to ship up to 4.5 million tonnes of Urals blend crude oil to Belarus.

Talks between Russia and Belarus have broken down repeatedly since New Year, causing a brief supply disruption to refineries in the first few days of 2010. The dispute centres on the tariffs Belarus must pay for Russian oil.

Europe, mindful of a dispute in 2007 that cut Russian oil supplies via Belarus, are keen that the ex-Soviet states resolve their differences. The Belarussian spur of the Druzhba pipeline supplies about one-tenth of Europe's supplies from West Siberia.

More talks

The two countries renewed high-level talks in Moscow on Monday. Belarus once again sent First Deputy Prime Minister Vladimir Semashko, who has the authority to sign any agreement, at the head of its delegation.

"Talks have started. There have been some developments and tomorrow they will be continued," a Russian government source told Reuters on condition of anonymity.

Russian Energy Ministry spokeswoman Irina Yesipova said she did not expect an outcome to the talks on Monday, but that negotiations would continue.

Minsk has taken a harder line with Moscow, stepping up pressure on Saturday by accusing its ex-Soviet neighbour of acting illegally in applying full export fees to oil pumped to Belarus.

Russia has also toughened its demands. After allowing Minsk to import Russian oil in 2009 at only 35.6 percent of the current crude export tariff, it is now prepared to sell only 6 million tonnes duty-free for domestic needs only.

The remaining 14.5 million tonnes a year, most of which Belarus refines and re-exports to the West, should pay the full duty, Moscow says.

Consumers along the Druzhba pipeline say they fear that any escalation of the dispute may affect transit supplies to Europe, which would affect Germany and Poland more than most.

Transneft, since publishing its original schedule, has since told oil companies to re-route one third of Belarussian oil flows to the Polish port of Gdansk to avoid pipeline capacity losses.

Reuters
Last Mod: 25 Ocak 2010, 20:57
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