Monday, August 07, 2006

Oil and Gas: Russian slashes rail tariffs for Caspian oil

Russia's Transportation Ministry has halved tariffs on railway transit of Kazakh and Turkmen crude and refined oil products to the Black Sea.

The discount is aimed at encouraging oil firms to send oil to the Russian port of Makhachkala on the Caspian, reload it onto rail for transit to ports on the Black and Azov Seas in Russia and Ukraine.

An official at the Transportation Ministry said the new tariff was equal to the cost of shipping oil from the Kazakh port of Aktau to Georgia's Batumi, making the offer competitive with existing routes.

An industry insider said Russia hoped to divert 250,000 tons per month from the Azeri-Georgian route.