Transneft Says ESPO Oil Flows to Pacific May Be Disrupted

OAO Transneft, Russia’s oil-pipeline monopoly, said crude exports from the Pacific port of Kozmino may be disrupted after OAO Russian Railways limited the number of rail tankers it can send to the coast.

Fifteen trains loaded with oil are stuck after the rail operator decreased transportation volumes allotted to Transneft, creating “a threat to the ship-loading program and Russian exports,” the pipeline company said today by e-mail.

Transneft is extending the East Siberia-Pacific Ocean pipeline to Kozmino this year to expand exports to the U.S., China and elsewhere in the region. Oil is now supplied to the port via rail from the link’s current end near the Chinese border. Transneft plans to load 1.4 million metric tons, or about 320,000 barrels a day, at the port from Aug. 1 to Sept. 1.

Russian Railways blamed a train station part-owned by Transneft for the congestion, saying “the operators’ untimely submission of transportation documents is the reason for the higher than normal backlog of tanker cars.”

The route in question served an average of 10 trains, or 668 wagons, a day in July, Russian Railways said today in an e- mailed statement.

“No measures have been taken” to fix the situation, Russian Railways said.

Transneft preferred shares fell 1.9 percent, the most in a week, to 51,027 rubles in Moscow, while the Micex Index declined 1.1 percent.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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