Russian Court Overturns Suspension Of Caspian Pipeline Consortium Exports

By Tsvetana Paraskova of OilPrice.com,

A Russian court of appeals in Krasnodar overturned on Monday a lower court decision that had ordered the suspension of most of Kazakhstan’s crude oil exports from a Russian port on the Black Sea. 

Last week, a Russian court ordered the Caspian Pipeline Consortium (CPC), which operates the key export route for two-thirds of Kazakhstan’s crude oil, to suspend activities for 30 days, citing environmental violations.

The exports take place from the Russian port of Novorossiysk on the Black Sea. While the port is in Russia, CPC exports consist of 90 percent crude from Kazakhstan and just 10 percent of Russian oil. 

The 1,500-km CPC pipeline from the giant Kazakh oilfields to Novorossiysk moves over two-thirds of all Kazakhstan export oil along with crude from Russian fields, including those in the Caspian region, CPC says. The consortium said in response to the court ruling last week that it “acts within the legal framework of the Russian Federation and is forced to execute the court Ruling.”

The court in Krasnodar today overturned the suspension of CPC’s business activities for 30 days and fined the consortium $3,195 (200,000 Russian rubles) instead, the consortium said in a statement.  

For reference, CPC said that “immediate suspension of its activity may lead to irreversible consequences for the operation process, emergence and development of an adverse and uncontrollable process at a technical facility, including its destruction, since the process requirements for oil transportation do not allow the immediate and simultaneous shutdown of operation.”

Last week’s ruling of the Russian court came days after Kazakhstan’s President Kassym-Jomart Tokayev offered the EU to buy more oil from Kazakhstan instead of Russia.

The Kazakh president “expressed concern about the risks to global energy security and emphasized Kazakhstan’s readiness to use its hydrocarbon potential to stabilize the situation in the world and European markets,” according to the website of the president, who had a telephone conversation with the President of the European Council, Charles Michel, last week.