Georgian Ports Run Out of Oil as Troops Block Rails

By Eduard Gismatullin

Aug. 20 (Bloomberg) -- Georgian Black Sea ports are running out of crude and oil-product supplies as Russian troops block railways near the city of Khashuri, a shipping agent said.

Rail transportation will probably resume in three to four days, Vako Kavzharadze, an agent at TeRo Co. Ltd. in the Georgian port of Batumi, said today in an e-mailed statement.

BP Plc, Azerbaijan's national oil company and other exporters halted crude and product exports by rail through Georgia to the Black Sea after a bridge was blown up near the village of Grakali on Aug. 16.

An ``alternative bridge is fixed, however Russian troops blocked the railways near the city of Khashuri,'' about 100 kilometers (60 miles) from Tbilisi, Kavzharadze said.

Anatoly Nogovitsyn, deputy chief of Russia's General Staff, denied the military's involvement in blocking railways and attacking the bridge.

``Why would we block a railway? We haven't done that,'' Nogovitsyn told reporters today in Moscow.

The Baku-Supsa pipeline, which pumps crude from the Azeri capital of Baku to the Georgian port of Supsa, has also been shut on security concerns because of the fighting in Georgia. Russia started withdrawing its troops from Georgia after President Dmitry Medvedev announced the pullout Aug. 17.

The BP-led Baku-Tbilisi-Ceyhan pipeline, which transports oil from Azerbaijan to the Mediterranean, plans to resume tanker loadings next week. The 1 million barrel-a-day link is undergoing tests after it was damaged by a blast and fire on Aug. 5, BTC Co., which operates the line, said today.

Shippers declared force majeure on exports from the Supsa and Ceyhan ports, a legal clause that exempts them from meeting contracts because of circumstances beyond their control.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net