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Russia’s Transnet Signs First Accord on Dirty Oil Compensation

Russia’s crude-pipeline driver has decided to pay its Kazakh counterpart a fixed per-bbl compensation rate of around $15 for oil that was contaminated by chemical substances, in response to two individuals with information of the matter.

The agreement between Transneft and KazTransOil is the first of its kind associated with Russia’s dirty-oil disaster, which became the worst interruption to the nation’s crude exports in decades after natural chlorides were located in supplies to European refineries through the Druzhba pipeline and cargoes exported from the Baltic port of Ust-Luga.

Transneft didn’t reply instantly to a request for comment on Thursday. The corporate has earlier mentioned it’ll compensate all parties hit by the pollution, taking a combined approach to payouts, with no plans for unique offers.

The Russian pipeline director provided a mechanism that simplifies estimations and compensation for losses that Kazakh producers suffered when their crude was mixed with dirtied oil on its way to Ust-Luga, KazTransOil stated in the assertion on Tuesday, without providing any particulars of the mechanism. In May, Kazakhstan calculated that about 600,000 tons of its crude were tainted. That’s about 4.4 MMbbl.

The total quantity of oil-contaminated in the Druzhba incident is 3.03 MM tons, adding 1.33 MM tons of piped oil and 1.7 MM tons delivered by tankers from Ust-Luga, Transneft said, citing records that confirmed the supply of oil. The corporate expects all parties concerned in the Druzhba event to finalize their figures for payment by summer end.

Earlier Patrick Pouyanne, CEO for Total, whose Leuna refinery was working at half capacity because of the contaminated supplies, mentioned the prices of oil contamination experienced by his firm would be around $15/bbl.

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