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Transneft Could Take BP to Court Over CPC

All shareholders but BP have agreed to expand Caspian Pipeline. Russian pipeline monopoly Transneft said it could be the reason to take BP to court

Transneft Could Take BP to Court Over CPC

In early May, Russia and Kazakh ministers agreed to increase the capacity of the Chevron-led pipeline, which takes 33 million tonnes of Kazakh crude to the Russian Black Sea port of Novorossiisk every year, to 67 million tonnes by 2012.

Russia, which owns 31 percent in the consortium as a host state, pressed for expansion, but BP said it opposed the terms as more funding was needed, and was looking to sell its 6.6 percent stake.

"If one of the shareholders tries to not sign the expansion agreement, we'll try to use legal precedents to prove unfair competition," Transneft spokesman Igor Dyomin told Reuters.

The CPC shareholders will have their next meeting on Nov. 25, at which they are expected to examine the possibility of expanding the pipeline.

Russia had initially rejected the plan, saying it would put additional pressure on the congested Turkish straits. Debt redemption schedules and interest were also disagreement points between Russia and Western partners.

Besides BP and Chevron, its private shareholders include Royal Dutch Shell, ExxonMobil and Russia's two largest oil producers, Rosneft and LUKOIL. Gulf state Oman recently sold its 7 percent stake to Russia.

Kazakhstan has a 19 percent stake, but has said it wants 3 percent of Russia's Oman stake.

CPC has been shipping oil since 2001. It pumps up to 750,000 barrels per day to Russia for re-export to the Mediterranean.

Author: Ksenia Kochneva


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