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Summary
- Companies
- One of three mooring points damaged, one offline
- Analysts estimate CPC exports halved
- Kazakhstan protests Ukraine strikes
- CPC exports had been seen rising
(Reuters) – U.S. oil major Chevron said late on Sunday that loadings of its Tengizchevroil venture’s crude oil were continuing at the Russian port of Novorossiysk following a Ukrainian naval drone attack that heavily damaged key equipment.
The attack on the Caspian Pipeline Consortium (CPC), which handles more than 1% of global oil, came as Ukraine stepped up its military operations in the Black Sea and hit two oil tankers, which were heading to Novorossiysk.
Ukraine has been attacking Russian oil refineries for months, using long-range aerial drones to strike deep inside Russia.
CPC, which includes Russian, Kazakh and U.S. shareholders, said on Saturday that one of the three mooring points at its Novorossiysk terminal had been damaged, halting operations.
Russia’s Kommersant daily, citing unnamed sources, said on Monday that oil loadings had resumed via the single point mooring 1 (SPM 1), while SPM 2 was damaged.
Usually, two moorings are engaged in loadings, while one is used as a backup.
SPM 3 has been idle on repair since November 12, according to Interfax news agency, citing a CPC representative, who had said the repair work could last up to two months.
ATTACK HALVES CPC EXPORTS, SLASHES INTAKE, ANALYSTS SAY
CPC accounts for around 80% of oil exports from Kazakhstan, which has limited options for overseas crude sales.
Research consultancy Energy Aspects said the drone attacks halved CPC exports.
“The full CPC port closure yesterday was precautionary and SPM 1 may have been restarted or will do so soon. Satellite images show a vessel berthing SPM 1 today,” it said.
“We understand from shippers that the National Caspian Oil Consortium has reduced intake from producers by 40%, but they only have storage for 2.5 days,” the analysts said.
Beyond that, CPC would have to curb output until SPM 3 comes back online, they said.
CPC declined to comment.
Industry sources told Reuters last week, before the attack, that Black Sea CPC Blend oil exports were set to rise to 1.7 million barrels per day (bpd) in December from about 1.45 million bpd in November.
CPC has said it plans to replace SPM 1 and SPM 2, which have been in operation since 2001, next year.
The manufacture of the two new units is expected to be completed in December, the consortium has said. The moorings are located some 5 kilometres (3.11 miles) from the shore and are linked to onshore terminal facilities by undersea pipelines.
Kazakhstan told Ukraine on Sunday to stop attacking CPC’s Black Sea terminal.
Ukraine said its actions were not directed against Kazakhstan or third parties and were only aimed at repelling what it called “full-scale Russian aggression”.
The Kremlin on Monday called the Ukrainian attack on CPC infrastructure “egregious” given its international significance and international participation.
Reporting by Ishaan Arora and Sherin Elizabeth Varghese in Bengaluru, Reuters bureau in Moscow; Editing by Sonali Paul, Guy Faulconbridge and Joe Bavier
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