Transneft opposes liberalization of refineries connection to oil pipelines

The Russian Ministry of Energy has proposed to drastically simplify connection of refineries to main pipelines, abolishing state examination of projects. The Ministry of Economy supported the initiative, but Transneft and the Russian Federal Service for Ecological, Technical and Atomic Supervision strongly opposed it: they believe that the liberalization will make possible the connection of mini-refineries (samovars), producing low-quality products. Such "samovars", according to Transneft, want to take only light oil that degrades the overall quality of the raw material in the pipelines. But experts believe that now – against the background of the falling in processing margins - the connection of new refineries is not the most urgent issue.

In late March, the Ministry of Energy sent for approval to the Government draft changes in the order of connection to the main oil refinery. The Ministry wants to make optional the passage of state examination when applying for connection of new or modernized plant. The simplification of the procedure is discussed since 2014 on the initiative of the FAS, but the changes haven’t yet been agreed upon. The FAS hopes that the new refineries will increase competition on the domestic market of oil and petroleum products. The Service, in particular, offered to cancel letters of guarantee that Transneft required from refineries before connecting - plants undertake to take certain amounts of oil from the system for at least three years.