Oil Transportation

Transneft Group’s core business activity is rendering services of oil and petroleum products transportation via oil and petroleum products trunk pipelines in the Russian Federation and beyond, including transportation outside of Russia on the basis of interstate and intergovernmental agreements. Moreover, Transneft and its subsidiaries provide crude oil storage, compoundingCompounding is controlled blending of oil streams in a pipeline and sales services.

Apart from its core activity, the Company is engaged in planning and supervision of oil transportation and supply to custody transfer points abroad, along with data collection and compilation. As an agent of Russian shippers transporting oil via the territory of the Republic of Belarus, Ukraine and the Republic of Kazakhstan, Transneft has signed contracts for oil transportation services with Polotsktranspetrol Druzhba, Gomeltransneft Druzhba, Ukrtransnafta and KazTransOil (TON-2).

Oil turnoverThe actual freight turnover is shown for routing orders accomplished и and specific transportation costsSpecific operating expenses for 2016-2017 are discounted to 2018 (inflation only)
Oil transportation (million tonnes)
Indicators 2016 2017 2018 Change, 2018 vs 2017, %
Acceptance into the Transneft System, total 483.49 477.61 480.40 0.6
including:
oil from Russia 464.53 459.18 462.34 0.7
oil from Kazakhstan 17.22 16.93 16.75 –1.1
oil from Azerbaijan 1.30 1.50 1.30 –13.43
oil from Turkmenistan 0.44 0.00 0.00 0.0
Oil deliveryExcept oil supply to cover own needs and fuel for third party recipients, total 483.40 477.52 479.81 0.5
including
to refineries in Russia 245.22 243.69 249.33 2.3
transshipment to the CPC-R system 0.39 0.02 0.00 –100.0
to neighbouring countries’ markets, including: 18.65 18.61 19.00 2.1
oil from Russia 18.00 18.07 18.03 –0.2
oil from Kazakhstan 0.65 0.54 0.96 77.8
to markets beyond the CIS, including: 219.14 215.20 211.48 –1.7
oil from Russia 200.82 197.19 194.57 –1.3
oil from Kazakhstan 16.63 16.43 15.70 –4.4
oil from Azerbaijan 1.22 1.58 1.21 –23.4
oil from Turkmenistan 0.47 0.00 0.00 0.0

During the past year, oil turnover in accordance with executed routing orders stood at 1,217.4 billion tkm, up 0.5% year-on-year.

In 2018, the total volume of oil accepted into Transneft’s system of oil trunk pipelines achieved 480.4 million tonnes, up 0.6% year-on-year, but down 0.6% as against 2016. Oil produced in Russia accounts for most of this volume (96.2%). The growth was attributable, among other things, to higher volumes of Russian oil delivered into the system, while the transportation of oil from companies operating in the CIS countries decreased.

In 2018, Transneft provided for delivery of 479.8 million tonnes of oil to destinations determined by the existing contracts (except oil supply to cover own needs and fuel for third party recipients). This is up 0.5% year-on-year. The growth was mainly registered for deliveries to Russian refineries, which was attributable to growth in refining and an increased demand for petroleum products in the domestic market. At the same time, exports of Russian oil have been declining for two years in a row.

Breakdown of oil delivery to consignees (%)