Russian Court Suspends Caspian Pipeline Ops for Thirty Days

One of the world’s largest pipelines that bring oil from Kazakhstan to the Black Sea, the Caspian Pipeline Consortium (CPC), has received a court order to suspend activity for 30 days, increasing the global worries over oil supplies.

The ruling of the Novorossiysk Court to suspend the operations of CPC- which includes US majors Chevron CXV.N and Exxon XOM.N and handles about 1% of global oil – is related to issues around the handling oil spills.

Russian regulators- industrial safety regulators Rostekhnadzor, Rosprirodnadzor, and Rosmorrechflot- were ordered by Viktoria Abramchenko, Deputy Prime Minister of the Russian Federation, to inspect the facilities of the Russian part of the consortium by the end of April.

Order No. VA-P11-5574 instructed the regulators to assess the technical condition of CPC-R JSC’s hazardous operation facilities and compliance with environmental requirements during their operation.

Their inspection has found some “documentary” irregularities in plans on how to tackle oil spills that occurred at the terminal last year.

The consortium, which declined to further comment on its activity and operations, has to abide by the ruling though oil loadings from CPC terminal were allegedly continuing as of midday on July 5 and it’s not clear if operations were continuing on July 6.

CPC Pipeline System’s 1,511 km – long length Tengiz – Novorossiysk pipeline is transporting over two-thirds of all Kazakhstan export crude and crude from Russian oil fields – including from the Caspian Region- making it one of the major investment energy projects with foreign capital in the CIS.

The three Single Point Moorings (SPM) the CPC Marine Terminal is equipped with allow to load tankers safely at a significant distance offshore even when weather conditions are poor.

It exported up to 54 million tonnes of Kazakh main crude grade, light sour CPC Blend, from the Black Sea last year. So any major disruption in the pipeline would additionally strain the global oil market which is facing one of the worst supply crunches since the 1970s Arab oil embargo.

The United States has allowed for flows from Kazakhstan through Russia to run uninterrupted despite the sanctions on Russian oil it has imposed.

The pipeline exported up to 54 million tonnes, or some 1.2 million barrels per day, of Kazakhstan’s last year from the Black Sea.

The pipeline’s operations have already been interrupted by damage to the Black Sea’s terminal equipment this year.

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