A Russian court has ordered a halt to the Caspian oil pipeline but exports are still flowing

An exterior view shows a new pumping station of the Caspian Sea Pipeline Consortium (CPC) near the city of Atyrau, Kazakhstan, October 12, 2017. REUTERS/Maria Gordeeva

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  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.
  • Two sources say oil shipments from the CPC terminal are continuing
  • CPC exports about 1.2 million barrels per day
  • Pipeline operations halted due to storms
  • Kazakhstan is considering measures to address CPC restrictions

MOSCOW (Reuters) – A Russian court has told the Caspian Sea Pipelines Consortium, which transports oil from Kazakhstan to the Black Sea via one of the world’s largest pipelines, to suspend activity for 30 days, although sources said exports have not. It was still flowing.

The CPC, which handles about 1% of the world’s oil, said the decision to suspend operations related to paperwork related to the oil spills and said the consortium that includes the US companies Chevron and Exxon. (XOM.N)to abide by the court ruling issued on Tuesday.

Two trade sources familiar with the port’s operations told Reuters that oil exports from the CPC terminal on the Black Sea were continuing on Wednesday morning.

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Three other industry sources said oil supplies from the fields to the CPC pipeline had not been cut off until Wednesday morning.

Any major disruption to the CPC would put further pressure on the global oil market, which is facing one of the worst supply crises since the Arab oil embargo of the 1970s.

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CPC said it has filed an appeal with the court in the Russian city of Novorossiysk requesting that the execution of the ruling be suspended to avoid a halt that could lead to irreversible consequences for the pipeline equipment.

She made no further comments when contacted by Reuters.

The Chinese Communist Party’s pipeline has been in the spotlight since Russia sent its troops into Ukraine, in what it calls a “special military operation.” As a result, the Western sanctions that were imposed caused Russian exports to decline and pushed up oil prices.

Oil prices rose on Wednesday, up more than 1% to more than $104 a barrel, boosted by supply concerns.

Russia has already reduced gas flows through the Nord Stream 1 gas pipeline, which supplies Russian gas to Germany and other European countries. This pipeline was operating at 40% capacity due to the dispute over equipment repair.


The United States has imposed sanctions on Russian oil but has said flows from Kazakhstan through Russia should continue uninterrupted. Meanwhile, the European Union has said it wants to wean itself off dependence on Russian fossil fuels by 2027.

A report on the status of the terminal seen by Reuters showed that oil shipments from the CPC terminal continued until midday on July 5, but it was not clear whether operations were continuing on July 6.

The Communist Party of China said on Wednesday that Russian Deputy Prime Minister Victoria Abramchenko had ordered regulators, including industrial safety regulator Rostecnadzor, to inspect the facilities of the Russian part of the consortium.

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She said the inspection discovered some “documentary” irregularities about plans for how to handle the oil spills. An oil spill occurred at the plant last year.

Kazakhstan said the government was discussing measures to address the impact of restrictions on oil exports through the Chinese Communist Party.

The pipeline exported up to 54 million tons, or about 1.2 million barrels per day, of Kazakhstan’s main crude, CPC light blend, last year from the Black Sea.

Pipeline operations have already been halted due to damage to Black Sea terminal equipment this year.

Meanwhile, Kazakh police said that an explosion occurred in the giant Tengiz oil field, the main source of oil for the Chinese Communist Party, killing two workers, Interfax news agency reported.

A source in the sector told Reuters that operations in the field are continuing after the accident.

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Reuters offices reports, additional reporting by Ron Bosseau in London; Editing by Edmund Blair and Guy Faulconbridge

Our criteria: Thomson Reuters Trust Principles.

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