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By John Helmer in Moscow

Russia’s second oil producer, LUKoil, has successfully moored the first of its new oil production platforms in the Russian sector of the Caspian Sea. The company issued an announcement last Friday. The ice-resistant platform is a production unit of the Yury Korchagin oilfield, which is located at sea, 180 kilometres southeast of Astrakhan, where the platform was built; and 240 kilometres northeast of Makhachkala, where the crude oil will be transshipped. Korchagin is scheduled to come onstream later this year.

Caspian Sea production now ranks as an equally high priority in LUKoil’s future oil production and export plan as the Timan Pechora wells, which feed the Barents Sea terminal at Varandey, in Russia’s far north.

The Korchagin field is expected to produce up to 47,000 barrels daily of crude oil, and 1.2 billion cublic metres of gas per year. It will be followed by the second of the Caspian offshore fields, known as Vladimir Filanovsky, with much larger production — about 181,000 bd, commencing in 2011. Other fields in the same area are also under development, and are expected to come onstream by 2015. In testing so far, Filanovsky has demonstrated an unusually high flow rate, some eighty times the average Russian well flow rate. Reserves of both oil and gas in the Russian Caspian sector are enormous. An estimated 75% of LUKoil’s Caspian reserves will be lifted as crude oil; the remainder as gas. The Russian oil output will be much larger than the Caspian fields opened by Azerbaijan – so large that they are expected to revive and transform the century-old oilfield sector of the Volga River delta.

The crude is expected to be loaded on shallow-draught Caspian tankers, and delivered to northern Iranian ports, where it will be swapped for export cargoes traded out of the Persian Gulf. The new crude will also be shuttle-tankered to Makhachkala, and then transported by Transneft pipeline across the Russian Caucasus to Novorossiysk port. From there the Russian crude will be taken by a second tanker shuttle westwards across the Black Sea to Burgas, Bulgaria, avoiding Turkey and the Bosphorus Straits. Part of the crude will be refined at LUKoil’s refinery at Burgas; most will pumped by the new pipeline to the Greek tanker terminal of Alexandropouli.

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