Kirkenes conquers Varandey

Norterminal in 2015 intends to reload six million tons of Russian oil in the fjord outside Kirkenes

Norwegian oil terminal company Norterminal is boosting its position in Russian Arctic energy as it takes on reloading of more oil from Lukoil’s Varandey terminal. 


Norterminal and its subsidiary Norterminal Floating Storage AS might soon be able to handle up to six million ton of Russian oil at its ship-to-ship facility in a fjord outside Kirkenes, Norway.

In an application to the Norwegian Environment Agency, the company seeks permission for a doubling of the volumes of ship-to-ship operations. The previous permission included only three million tons, a press release from the Environment Agency reads.

The company expects to reach the three million ton limit already by mid-June and expand to six million tons before year’s end.

If approved by the Environment Agency, Norterminal will be able to cover almost all of Lukoil’s needs for Arctic trans-shipment capacity. Lukoil is the owner of the Varandey terminal, a key infrastructure object for the company’s oil production in the Timan-Pechora province. Oil from several regional fields, among them the Yuzhno-Khilchuyu field, is pipelined to the terminal and from there taken by ice-class tankers to the trans-shipment facility.

As illustrated with data from Patchwork Barents, the regional dataportal, Lukoil in 2014 shipped out a total of 5,9 million tons from Varandey.

Norterminal’s use of ship-to-ship operations is temporary and meant to last only until a new land-based terminal facility is operational in 2019. As previously reported, the planned terminal includes storage capacity of up to one million cubic meter of crude oil in caverns and tanks. Between 150 and 300 tankers a year will make port calls to the terminal, the largest up to 300,000 dwt, and up to 10 million tons of crude oil can be shipped from the site annually.

Before 2014, Norterminal operated similar ship-to-ship reloading operations in a fjord near the town of Honnigsvåg.

The terminal activities have not developed all smoothly. In early 2015, inspectors from the Environmental Agency concluded that Norterminal had violated environmental regulations on operations in icy waters. The company was subsequently reported to the police by environmental organization Bellona.