International trading firm Vitol and Azerbaijan’s state oil company SOCAR have agreed to transport Turkmen oil volumes via Baku-Tbilisi-Ceyhan (BTC) pipeline, which will result in a sharp decline of transit shipments via Russia’s Black Sea port of Novorossiisk, Report informs referring to Reuters.
“SOCAR and Vitol agreed to transport about 1 million tons of Turkmen oil via BTC pipeline per year. The supplies will start from October,” one source familiar with the details of the agreement said.
Vitol supplies Turkmen oil volumes it purchases from UAE’s ENOC under term contracts, the other source added.
SOCAR has previously said that it was looking to increase oil supplies to the BTC pipeline by attracting more companies from Russia and Turkmenistan.
Vitol’s decision is likely related to the fact that BTC will provide higher margins. The Azerbaijani oil pipeline maintains the quality of light and sweet Turkmen oil.