Kazakh CPC oil exports suspended due to storm damage, bad weather

An exterior view shows a new pumping station of the Caspian Pipeline Consortium (CPC) near the city of Atyrau, Kazakhstan October 12, 2017. REUTERS/Mariya Gordeyeva
  • CPC normally delivers 1.2 mln bpd of oil
  • Novak says pipeline could be halted for up to two months
  • Delivery of spare parts has been halted - CPC's head

March 23 (Reuters) - Crude oil exports from Kazakhstan's Caspian Pipeline Consortium (CPC) terminal on Russia's Black Sea coast stopped fully on Wednesday after damage caused by a major storm and continued bad weather, a port ship agent and the head of CPC said.

The CPC pipeline has been in the spotlight since what Russia calls a "special military operation" in Ukraine, which has restricted Russian exports and led to an oil price spike. The United States has imposed sanctions on Russian oil, but said flows from Kazakhstan through Russia should run uninterrupted.

Two of three loading facilities at the Black Sea port of Novorossiisk were damaged by the storm and would take at least one and a half months to repair, the agent told Reuters.

CPC Chief Executive Niklai Gorban said the damage was "critical". He also said foreign suppliers have stopped deliveries of spare parts for the damaged facilities..

He didn't elaborate why, while the West has introduced sanctions against Russia over Ukraine.

Russian Deputy Prime Minister Alexander Novak later said that oil supplies by the CPC may be completely stopped for up to two months.

"Technical experts are making checks... Situation is quite difficult on the whole," Novak said.

The CPC pipeline carries around 1.2 million barrels per day of Kazakhstan's main crude grade, light sour CPC Blend. The volume accounts for 1.2% of global demand. read more

Most of the oil in the pipeline belongs to Russia, Kazakhstan and international oil majors such as Chevron (CVX.N). Any major disruption to its flows will put further strain on a global oil market facing one of the worst supply crunches since the Arab oil embargo in the 1970s.

"Yesterday, after a spell of really strong northern wind the terminal inspected their facilities and found that SPM (single point mooring) 3 required technical service and had to be taken off service. Today it was decided that SPM 2 requires the service as well and therefore would stay off operations," the ship agent said.

The third facility was still operational but bad weather on Wednesday stopped these flows as well.

Reporting by Julia Payne in Lausanne, writing by Rowena Edwards; editing by Jason Neely and Louise Heavens

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