How does the pipeline stack up against other oil transportation modes? A FBK Legal partner at the meeting of the Expert Board of Transneft

Alexander Ermolenko, a FBK Legal partner, took part at the meeting of the Expert Board of Transneft on alternative ways of transporting oil and oil products. The meeting discussed prospective ways of transporting oil by rail, land and sea.

As explained by Alexander Ermolenko, the meeting thoroughly dwelt on, among other things, development of oil and oil products transit routes along the Northern Sea Route. The government has been discussing the possibility and desirability of such transit route since late 90s. There is a number of government resolutions and the President’s decrees which fundamentally aim to encourage the development of the Northern Sea Route as a through passage. Presently, there have been achieved two milestones out of the vast modernisation programme launched to serve the purpose of developing the transit route, including construction of the port infrastructure and renovation of the icebreaker fleet.

The expert noted that the pro arguments are quite convincing and it’s time to unlock vast potential for growth of the NSR. According to Alexander, the freight turnover of the NSR has been dwindling for the last three years. This is partly driven by external factors, including economic crisis which understandably drives turnover down. But we also have to admit that to encourage shippers to use the transit routes, additional measures are needed, including those pertaining to regulation of port regimes and free economic zones of the Polar Region.

He went on to say, that “our focus moving forward is to foster further development of the NSR, otherwise we wouldn’t be able to fully unlock potential for growth of this promising area.”

The meetings of the Expert Board of JSC Transneft have served as a public platform for discussion of topical issues of operation and regulation of the fuel and energy complex of Russia since December 2012. They regularly bring together experts from leading advisory firms, government authorities and energy companies leadership.

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