The Transneft Strategy (hereinafter referred to as the Strategy) was approved by the Board of Directors of Transneft on 19 November 2014 (Minutes No. 23). The goal of the Strategy is to develop and upgrade the trunk pipeline transportation system of the Russian Federation to fully satisfy the demand for oil and petroleum products transportation both on the domestic market and on export routes, based on:

  • Application of equipment manufactured in Russia
  • Application of state-of-the-art sectoral technologies that ensure a high level of reliability as well as industrial and environmental safety
  • Ensuring that revenues from oil and petroleum products transportation are sufficient to implement the programme for development, technical upgrading and revamping of trunk pipeline facilities

Main Lines of Development In accordance with the Strategy and the Long-Term Development Programme of Transneft

  • Development, technical upgrading and revamping of the oil and petroleum products trunk pipeline system
  • Environmental protection
  • Industrial safety
  • Innovative development
  • Import substitution
  • Energy saving
  • HR management
  • Anti-terror security of facilities
  • Reduction of operating expenses
  • Reduction of capital costs
  • The Company’s financial and economic performance indicators

2018: Main Lines of Development

1. Developing the oil and petroleum products trunk pipeline system

The following investment projects have been completed
The Sever Project (Stage 2). Developing the PPTP system to increase petroleum products supplies to the port of Primorsk To 25 million tonnes of diesel fuel a year (the project is completed)
Revamping the PPTP system to increase the volume of petroleum products transported to the Moscow area Increasing the volume of light petroleum products transported and expanding the range of motor petrols (the project is completed)
The ongoing investment projects include
The ESPO PS – Komsomolsk Refinery oil pipeline offshoot Up to 8 MTPA (the main facilities have been completed) – to be connected in 2019
Expansion of the ESPO PS at the section from the Skovorodino PS to the SSOP Kozmino Up to 50 MTPA – 2019
Expansion of the ESPO PS at the section from the Tayshet IPS to the Skovorodino PS To 80 MTPA – 2019

2. Environmental protection

The specific air pollutant emissions during oil and petroleum products transportation via trunk pipelines were reduced by 1.05%.

3. Industrial safety

Low specific accident rate at trunk pipelines has been achieved: not more than 0.059 accidents per 1,000 km of the line.

4. Innovative development

The volume of financing allocated to innovation projects, including R&D, from own funds as the percentage of Transneft’s revenue from oil transportation services (by RAS) came to 1.41%.

5. Import substitution

As part of the Corporate Import Substitution Plan, the Company has mastered domestic manufacture of 24 types of equipment as of the end of 2018.

Also launched in 2018 was the Russian Electric Motors factory (REM, JSC, Chelyabinsk) manufacturing high voltage electric motors.

6. Anti-terror security of facilities

No terrorist attacks were reported at trunk pipeline facilities in 2018. Commissioned last year were 51 facilities with technical security equipment installed.

7. Raising the operational efficiency

The Integrated Indicator of Operational Activity Efficiency stood at 100%: it shows the reduction of operating costs and specific electricity consumption for oil transportation over trunk pipelines as well as an increase in the productivity of labour.

8. Reduction of capital costs

Capital expenditure was cut by RUB 4.2 billion.

9. Financial and economic performance indicators

The revenue increased from RUB 884 billion in 2017 to RUB 980 billion.

Excluding crude oil sale and purchase transactions, based on contracts with Rosneft and China National United Petroleum Corporation, EBITDA grew from RUB 409 billion in 2017 to RUB 433 billion.

Specific operating costs for oil transportation in comparable prices went down to RUB 18.92 per 100 tkm from RUB 19.32 per 100 tkm in 2017.

Specific operating costs for petroleum products transportation in comparable prices went down to RUB 751.26 per tonne from RUB 824.23 per tonne in 2017.

Target Indicators till 2020 as Stipulated in Transneft Strategy

Increasing the throughput capacity of the ESPO-I PS
to 80 MTPA
Increasing the throughput capacity of the ESPO-II PS
to 50 MTPA
Revenue in 2018 is
980 RUB bn

  1. Developing the oil and petroleum products trunk pipeline system:
    • increasing the throughput capacity of the ESPO-I PS to 80 MTPA and that of the ESPO-II PS to 50 MTPA;
    • connecting the Komsomolsk Refinery to the ESPO-II PS for ensuring the supply of up to 8 MTPA;
    • ensuring transportation of petroleum products from newly connected refineries;
    • keeping the sulfur content in the crude oil pumped via the Transneft system within the limits set in the rational routing scheme.
  2. Import substitution:
    • decreasing the use of imported products to 3%.
  3. Fire safety:
    • accident rate reduction at trunk pipelines to 0.12 of emergency situations per 1,000 km of operated pipelines (the updated plans call for accident rate reduction to 0.072 till 2020).
  4. Environmental protection and conservation:
    • no discharge of insufficiently treated wastewater.
  5. Reduction of operating costs and capital expenditure:
    • reducing expenses on pipeline construction and operation; maintaining the optimal level of expenditure for consumers.