Siberia-Pacific oil pipeline construction “to begin this year”

The pipeline, estimated to cost between $15-16bn will eventually run from Taishet, in central Siberia, to Perevoznaya on the Pacific coast close to Russia’s border with China. There will be 44 pumping stations along the 4,200-km route.

The pipeline will have the capacity to transport up to 80m t/yr of oil for shipments to energy-hungry China and Japan, as well as to South Korea, Indonesia, Australia and potentially the United States. The first segment, running east from Taishet to Skovorodino, near eastern Siberia’s border with China, should enter into service in 2008, Mr Putin said.

Speaking at a socioeconomic conference in Yakutia, NE Siberia, Mr Putin acknowledged the project would require support from foreign and domestic private investors and the Russian state. He also warned the pipeline would “not be efficient” if the oil and gas industry were not developed across eastern Siberia. He said that expanding the oil and gas sector in the resource-rich republic of Yakutia could serve as a springboard for the development of the whole region and boost Russia’s capacity to increase supplies to Asian markets.

The pipeline project initially caused great enthusiasm in Japan, the world’s second-largest economy, which is keen to reduce its substantial dependence on Middle Eastern oil, and the Japanese government, which relies on the Middle East for more than 90% of its oil imports, volunteered to pay half the costs for building the pipeline. But it withdrew the offer when it discovered the pipeline would first serve China, directly from Skovorodino. Oil for Japan will be transported from Skorovodino by train to ships on the Pacific coast, pending construction of the second section of the pipeline, which will be routed southwards towards the port city of Vladivostock and the Chinese border.

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