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Transneft to drop pipeline project with Rosneft due to tariff freeze

MOSCOW (Reuters) - Transneft (MCX:TRNFP) has decided to withdraw from a project in which it was to construct a pipeline to reach Rosneft's (MCX:ROSN) Far East Komsomolsk refinery due to an expected freeze in transportation tariffs, an executive at the company said.

Tariffs are the only source of revenue for Transneft, Russia's monopoly pipeline operator, which is now expecting its revenues to drop by over 30 billion roubles (574 million pounds) next year following a decision to freeze the state-regulated tariffs.

First Vice President Maxim Grishanin told reporters that the oil transportation tariff is not expected to rise after October1 2013.

(Reporting by Vladimir Soldatkin; writing by Katya Golubkova; editing by Megan Davies)