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Today's paper. Last Updated: 06/01/2012

Russia Hinders Turkey Pipeline

Russia, seeking to boost oil shipments through the Black Sea port of Novorossiisk, will not support new pipelines crossing Turkey, Fuel and Energy Minister Yury Shafranik said Tuesday.


"The Russian side will insist on the option that has already been virtually decided for transporting oil through Novorossiisk, and then through Bulgaria and Greece," Itar-Tass quoted him as saying.


Shafranik was speaking after talks in Moscow with a Turkish delegation led by Energy and Natural Resources Minister Veysel Atasoy.


Turkey, concerned about heavy tanker traffic through the narrow Bosphorus Straits, has been lobbying for a new pipeline across its territory to carry oil from Russia and from big new fields in the former Soviet republics of Kazakhstan and Azerbaijan.


In June, Turkey implemented restrictive shipping rules designed to protect the narrow Bosphorus Straits following a rise in traffic and an oil tanker crash in March. Russia, however, has vehemently opposed the regulations, which run counter to its efforts to boost hard-currency earning oil exports through Novorossiisk.


Presently, Moscow effectively controls the flow of oil from Kazakhstan and Azerbaijan, which have no alternative but to use Russian pipelines.


But a new pipeline would loosen Russia's grip and provide a major boost for two of the largest foreign oil ventures in the former Soviet Union: the $20 billion Tengizchevroil project in Kazakhstan and the $7 billion Caspian Sea oil and gas deal signed recently between Azerbaijan, the privatized Russian oil giant LUKoil and a consortium of Western oil companies.


Tengizchevroil, a joint venture between the United States' Chevron Corp. and Kazakh state oil company Kazakhstanmunaigaz, has been forced to scale down operations because of stringent quotas imposed by Russia on Kazakhstan exports through its pipelines.


The Caspian Sea deal, which Russia has refused to recognize, is expected to run into similar problems getting its oil to export markets through Russian-controlled pipes.


Moscow favors building a pipeline across Russia to Novorossiisk, its main crude export outlet on the Black Sea.


The oil would then be shipped to the Bulgarian port of Bourgas. From there, a new pipeline would carry it across Bulgaria to the Greek Mediterranean port of Alexandropolis, bypassing the Bosphorus.


Itar-Tass said possible oil and gas pipelines were the main theme of Tuesday's talks in Moscow.


Shafranik said the route via Russia and through Novorossiisk was the most economical. He added that differences with Turkey could be overcome and invited Turkish firms to take part in Russian projects.


"This is better than blocking Russian projects," he joked.




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