Work on second leg of East-Siberian pipeline could start 2015

Construction on the second leg of the East Siberia-Pacific Ocean (ESPO) pipeline, managed by state-run pipeline operator Transneft, could begin in 2015-2017, a deputy industry and energy minister said Thursday.

The ambitious East Siberia-Pacific Ocean oil pipeline is slated to pump up to 1.6 million barrels per day of crude from Siberia to Russia`s Far East and then on to China and the Asia-Pacific region.

"It will depend on the pace of the East Siberia study but will happen no earlier than 2015-2017," Andrei Dementyev said at a meeting between Prime Minister Mikhail Fradkov and government members.

Dementyev specified that the second leg could be commissioned or its construction could begin around that time. The ESPO pipeline will be over 4,700 kilometers (2,900 miles) in length, and is being built in two stages.

In the first stage, a 2,757-kilometer (1,713-mile) section will be built with a capacity of 30 million tons (220.5 million bbl) of oil per year. The project`s first leg is estimated to cost $11 billion and will be commissioned in December 2008. It will link Taishet, in East Siberia`s Irkutsk Region, to Skovorodino, in the Amur Region, in Russia`s Far East.

The second leg will stretch for 2,100 kilometers (1,304 miles) from Skovorodino to the Pacific. It will pump 367.5 million barrels of oil annually. The second stage also envisages an increase in the Taishet-Skovorodino pipeline`s capacity to 588 million barrels.

Dementyev also said the transit rates for the East Siberia-Pacific Ocean pipeline are expected to be set in the second quarter of 2008.

"The tariff of $38.8 per ton per 100 km (62 miles), which we are considering to pump crude to the [Pacific] coast and China is cost effective and quite competitive with rates [for pumping crude] in the western direction ," Dementyev said.

Transneft and China National Petroleum Corporation have signed an agreement on the construction of an ESPO branch to China, Dementyev said.

Russian Industry and Energy Minister Viktor Khristenko earlier said the capacity of a Chinese leg of the ESPO pipeline could reach 30 million tons (220 million bbl) a year.

"There is an opportunity to build a Chinese leg from Skovorodino [in the Russian Far East] as part of the project," Khristenko said. "At the first stage its capacity could amount to 15 million tons (110 million bbl), and if the entire system is developed capacity could hit 30 million tons (220 million bbl)."

sections: Economics, Region News
regions: Siberian region