UPDATE 1-Russia's Transneft says could redirect Ukrainian Druzhba volumes to Baltic ports

Wed May 14, 2014 7:25am EDT

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MOSCOW May 14 (Reuters) - Russian pipeline monopoly Transneft could redirect oil that is shipped annually via the Druzhba pipeline through Ukraine to the Russian Baltic ports of Primorsk and Ust Luga, a company official said.

"If problems arise with oil supplies via the Ukrainian part of Druzhba, we can easily redirect this 17 million tonnes to Primorsk and Ust Luga," Igor Katsal, head of the transportation department at Transneft, told a company magazine in an interview published on Wednesday.

Since pro-Moscow President Viktor Yanukovich was toppled in February, relations between Russia and Ukraine have plunged to new lows, with energy at the forefront of the standoff.

Moscow has threatened to stop gas supplies to Kiev if Ukraine's Naftogaz fails to pay off its debts and start a pre-payment scheme. Kiev has refused to pay a higher price for Russian gas, accusing Moscow of using energy as a weapon to punish its new leaders for turning West.

Transneft's words may suggest that Russia could use oil supplies to pressure its neighbour, analysts said.

Last year, Russia shipped a total of 50.3 million tonnes of oil via the Druzhba pipeline, which splits in Belarus into two streams supplying European refineries.

Europe has tried to cut its dependence on Russian oil and gas. Moscow has also moved to diversify its exports, looking to redirect energy flows to Asia.

Russia is hoping to sign a gas contract with China, while additional oil volumes to Asia could be shipped only after both the existing East Siberia-Pacific Ocean pipeline and its spur to China are expanded.

Katsal told the magazine that Russia exports around 150 million tonnes of oil and around 100 million tonnes of oil products annually to Western consumers, a volume which could not be redirected quickly.

"Of course over the next three to five years ... it is an unrealistic (task) to redirect such volumes to the east," he said. (Reporting by Katya Golubkova, Editing by Timothy Heritage and Elizabeth Piper)

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Comments (1)
reuters_comm wrote:
if new price is a concern for Ukraine – why they still did not pay for the first quarter with the old price… at least pay that… and then rand about new price… specially when IMF specifically allocated portion of the first money to pay for gas.. Ukraine holds EU hostage since Ukraine knows if it does not fill up it’s underground reservoirs – EU will not receive the gas in full.. Ukraine did not start filling up those reserves… it is Ukraine who uses gas leverage to pressure it’s neighbors … Ukraine is practically saying – we will not pump gas before you give us the price that we want… knowing quite well that it will hurt Europe…

May 14, 2014 2:20pm EDT  --  Report as abuse
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