EU embargo diverts Lukoil's Caspian oil to CPC link

Equus Mining

30/11/2022 10:27

LONDON, Nov 30 (Reuters) - Russia's Lukoil will stop
exports from its Caspian oilfields via the Baku-Tbilisi-Ceyhan
(BTC) pipeline from December due to Western sanctions and divert
them to the Caspian Pipeline Consortium (CPC) system, four
sources with knowledge of the matter told Reuters.
    A European Union embargo from Dec. 5 is set to ban European
buyers from purchasing and transporting Russian oil.
    As a major route for Kazakhstan's oil, CPC oil exports are
excluded from the ban. 
    "Russian oil is leaving BTC, the reason is sanctions, BTC
doesn't let Russian oil in," - one of the sources said. The
other sources, who all spoke on condition of anonymity because
of the sensitivity of the issues, said the decision was led by
BTC's western shareholders.
    Lukoil supplies oil to the BTC from its fields on the
Caspian Sea - the Yury Korchagin and Filanovsky. The volume
exported from the fields via the route is about 2 million tonnes
per year.
    Lukoil's oil exports via the CPC are seen growing to 660,000
tonnes in December from 364,000 tonnes in November, a
preliminary loading plan for December and Reuters calculations
show.
    Lukoil and CPC declined to comment. SOCAR, which has been
purchasing the Russian company's oil for transport via BTC, and
BP, which leads the BTC consortium, did not immediately answer
Reuters' requests for comment. 
    The CPC is the main route for the export of Kazakhstan's
oil, accounting of more than 80% of the total volumes. About 10%
of oil shipped via the CPC originates from Russia.
    CPC Blend  BFO-CPC  exported via the CPC pipeline currently
trades at a significant discount to Azeri BTC  BFO-AZR  oil,
which is supplied via BTC.
    BTC has a capacity of 1 million bpd, but it is not used in
full. This year exports are planned at 660,000 bpd. 
    The main exporters of the Azeri BTC oil are Azerbaijan's
SOCAR and BP, as well as Hungarian company MOL, Exxon  XOM.N 
and Turkey's TPAO.
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EXCLUSIVE-Kazakhstan to start oil sales via Azeri pipeline to
bypass Russia - Reuters News     urn:newsml:reuters.com:*:nL8N2ZH6H3
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 (Reporting by Reuters reporters; editing by Barbara Lewis)