Ukraine and Russia extend oil transit contract until 2030

UkrTransNafta and Russia’s Transneft agreed on Tuesday to extend the current contract for transporting oil through Ukraine by another 10 years, until January 1, 2030, the Ukrainian company announced in a press statement.

The document was signed in Zagreb by UkrTransNafta CEO Mykola Havrylenko and Transneft Vice President Sergey Andronov.

Apart from extending the contract, another agreement was signed which updates a number of its terms, taking into account the current state of changes in the oil transport services market in the region. However, the basic principles of cooperation (such as the manner of payment for services and the mechanism for cooperating on the level of technical services) have remained unchanged.

“The signing of the additional agreement will guarantee the safe and reliable operation of Ukraine’s oil transport system on a long-term basis, set the stage for loading the company’s system of oil pipelines with transit quantities of oil towards European countries, and ensure a long-term stable source of income for UkrTransNafta,” the company stated.

The current contract between UkrTransNafta and Transneft was signed on November 16, 2004.

According to Enkorr, during the period between 1992 and 2001, the oil transit through Ukraine was 49-53 million tons per annum (MTPA). In 2002, Russia started using the first route of the 12 MTPA Baltic oil pipeline, as well as a 28 MTPA pipeline to the port of Novorossiysk. As a result, between 2002 and 2010, the transit volume through Ukraine dropped to 27-40 MTPA. In 2011, the second line of the 25 MTPA Baltic oil pipeline was commissioned, and transit through Ukraine dropped again to 14-18 MTPA.

UkrTransNafta belongs to Naftogaz of Ukraine. The total length of the company’s oil pipeline system is 4,767 km, with 51 pumping stations. The oil transport system includes 11 reservoir areas with a total capacity of 1.08 million cubic meters.

  UkrTransNafta, Transneft, Ukraine, Russia