REPORT for 2015 year

1.2. Principal competitors

In Russia in addition to the system of main oil pipelines of Transneft PJSC there is a pipeline system of Caspian Pipeline Consortium (hereinafter - CPC) of pumping capacity 42.8 million tons, as well as other systems and supply pipelines owned by manufacturing companies.

At present CPC provides competition to Transneft PJSC in oil transportation segment in the direction of the port of Novorossiysk. Services for oil transportation provided by CPC are focused on the oil producers of the Republic of Kazakhstan and oil of Russian shippers.

The railway transportations provide competition to Transneft PJSC in petroleum products export and transportation thereof to regional markets of Russia. Currently 60% of light-oil products fall to the share of railway transportations. The Company's share is less than 25% of the transportation of light-oil products produced in the Russian oil refinery plants.

Important advantages of railway transportations such as an extensive network of railways in comparison with the system of main oil pipelines, the ability of transportation of small petroleum products batches with complete preservation of quality, the possibility of relatively fast delivery, as well as virtually unlimited range of transported oil products based on the specifics of the oil refinery plants, take on enormous importance in transporting of petroleum products in the domestic market.

These advantages have provided a significant share of transport of light-oil products (especially motor gasoline) in the domestic market of the Russian Federation to the railway transportation.

The other competitor of Transneft PJSC in long-distance transportation of petroleum products is waterborne transportation. However, this kind of petroleum products transportation provides competition within a limited period of navigation: 5 – 6 months a year. 

In short-distance transportation, mainly in intraregional link, the principal competition to Transneft PJSC is provided by motor transport, advantage of which is the possibility to perform petroleum products transportation in curb-to-curb way, in particular, from oil refinery plants and oil delivery terminals to the local consumers.