On 23 June 2022, a session was held of the Fifteenth Arbitration Court of Appeal regarding the claim of the Black/Azov Sea Authority of the Federal Service for Supervision of Natural Resource Usage to recover the damage caused to the water body by the oil spill at the CPC Marine Terminal in August 2021.
CPC requested the court once again to carry out forensic examination so as to raise the following questions:
- what are applicable methods (specified in the Methodology for Estimation of Damage Caused to Water Bodies by Violation of the Water Legislation approved by Resolution No. 87 of 13.04.2009 of the RF Natural Resources Ministry) to determine the mass of oil spilled into the water body as a result of damage to the SPM-1 expansion joint casing which occurred on 7 August 2021;
- determine the mass of oil spilled into the water body as a result of damage to the SPM-1 expansion joint casing which occurred on 7 August 2021 by all applicable methods established when answering Question No. 1.
At that, CPC submitted to the court its versions of estimating the spilled oil volume as a value having direct impact upon the amount of penalty, which were based on hydrodynamic models, mathematical calculations, water sample tests, scientific research of oil solubility in sea water etc.
However, the court in its session on 23 June 2022 resolved not to grant the request and leave the ruling of the court of first instance in force.
Caspian Pipeline Consortium, being a law-abiding company, will execute the court ruling and pay the penalty within the statutory time. Further on, CPC intends to stand its ground on arbitration within the legal framework.
earlier, CPC posted its comments on the first instance court session at: https://cpc-online.ru/publication/in-focus/4786/?movepage=5
For information:
The CPC Pipeline System is one of CIS largest energy investment projects that involves foreign capital. The length of the Tengiz – Novorossiysk pipeline is 1,511 km. This route moves over two thirds of all Kazakhstan export oil along with crude from Russian fields including those in the Caspian region. CPC Marine Terminal is equipped with three Single Point Moorings (SPM), allowing tankers to be loaded safely at significant distance offshore, including in poor weather conditions
CPC Shareholders: Federal Agency for State Property Management represented by Transneft (trustee) – 24%, CPC Company – 7%, KazMunayGas – 19%; Kazakhstan Pipeline Ventures LLC – 1.75%, Chevron Caspian Pipeline Consortium Company – 15%, LUKARCO B.V. - 12.5%, Mobil Caspian Pipeline Company - 7.5%, Rosneft-Shell Caspian Ventures Limited - 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2%, and Oryx Caspian Pipeline LLC – 1.75%.