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Monday, February 28, 2005

Transneft: Arctic Link Could Cost $2.2Bln

February 28, 2005. By Michael Teagarden and Eduard Gismatullin Bloomberg - Oil pipeline monopoly Transneft said it may cost $2.2 billion to build a link from northern Russia to the Arctic Ocean to help companies such as Total increase exports. Russia's oil output has surged about 50 percent since 1999, straining the capacity of pipelines, especially in regions such as Timan-Pechora, a northern oil field being developed by LUKoil. Total, Europe's largest refiner, said insufficient export capacity was stalling investment at its northern Kharyaga field. "Transneft thinks it is feasible to transport Timan-Pechora oil along the route from Kharyaga" to the Pechora Sea port of Indiga, where an oil terminal with the capacity of 480,000 barrels per day could be built, the company said in a statement Friday. Transneft earlier looked at plans to build a pipeline from the town of Surgut in western Siberia to Indiga that had a price tag of $6 billion, Transneft deputy chief executive Sergei Grigoryev said Friday in a telephone interview. The company will not decide on the Kharyaga-Indiga link until it has determined whether oil producers would support the new pipeline, Grigoryev said. The line from Kharyaga would be able to export almost all of Timan-Pechora's oil output, clearing space in existing pipelines for crude from western Siberia, Transneft chief executive Semyon Vainshtok has said. LUKoil proposed that Transneft build the pipeline from Kharyaga, both Vainshtok and Grigoryev said. "Of course, it would be better for us to use infrastructure that will be built" by Transneft, Leonid Fedun, a deputy chief executive at LUKoil, said earlier this month. "The question is when this pipeline will be built." LUKoil is upgrading the Varandei oil port in the Pechora Sea to reach an annual capacity of 240,000 bpd in 2007, Fedun said. LUKoil plans to export about 36,000 bpd of crude through Varandei this year. LUKoil and ConocoPhillips have established a joint venture, Rusco, to tap Timan-Pechora's fields and ship crude to the United States via Varandei. The venture's output is expected to reach 200,000 bpd by 2008, LUKoil said. LUKoil may trim its plan for Varandei expansion if Indiga is built, Fedun said. The port can be expanded to a capacity of between 100,000 bpd and 120,000 bpd, down from the original plan. Transneft planned to increase the capacity of its Baltic oil pipeline, which links western Siberia to the port of Primorsk near St. Petersburg, to the planned maximum of 60 million tons per year in the first half of next year, Transneft said Friday. The expansion was earlier planned by the end of 2005. A feasibility study for a pipeline to ship oil from eastern Siberia to the country's Pacific Coast should be completed by June 30, with construction set to begin this year, Transneft said.

State-held Transneft to complete Baltic oil pipe system project by H1/06.

02.28.05 IntelliNews Today  - Transneft plans to complete Baltic oil pipe system development by H1/06. Until then 145km of pipes need to be built, one oil pumping station must be built, 8 more repaired, and the oil transit port in Primork should be expanded. The system will have a capacity of 60mn tons of oil. The length of the pipe system will be 467km and its cost USD 2.19bn . The decision was made during the meeting of Transneft’s Board of Directors held on Feb 25.

Friday, February 25, 2005

Georgia Wants to Sell Coastal Pipelines to Russia's Gazprom

Image by MosNews.com24.02.2005 18:30 MosNews - Georgia would like to make hundreds of millions of dollars on the sale of coastal pipelines that supply Russian gas to Georgia and Armenia. This information was revealed on Thursday, Feb. 24, by Georgia's Minister for Economic Reform and former Russian businessman Kakha Bendukidze. "We want to sell the coastal pipelines to [Russian gas monopoly] Gazprom or to a Western investor," Bendukidze told Reuters, adding that the sale would include a clause to guarantee supplies to Georgia. "The price for the pipeline will not be tens of millions but hundreds of millions of dollars," he said. He also said the buyer could extend the network, enabling Gazprom to pipe gas from Russia to Turkey. The pipelines capacity has fallen to 7-8 billion cubic meters annually since the fall of the Soviet Union, when they supplied 16 billion cubic meters. Repairs are likely to cost around $200 million, experts say.

Russia not to alter plans for oil terminal in Far East despite ecologist concerns

VLADIVOSTOK, Russia, Feb 25 (AFP) - Russia will not change the site for an oil terminal of its vital pipeline linking Siberian oil fields and the Pacific despite ecological and popular protest, a top Russian official said Friday. "Choosing the Perevoznaya bay as the end point for the pipeline is the Russian government's decision, and there will be no further discussion or consideration of other alternatives," chief of Russia's sea and river transport agency Vyacheslav Ruksha said. Ecologists argued that Perevoznaya, only 50 kilometers (30 miles) south of Vladivostok, was dangerously close to the Far East's major national parks and could prove a disaster for the coast and Vladivostok's one-million population. The WWF wildlife protection fund and local non-governmental organisations assembled over 4,000 signatures to protest the terminal's construction in Perevoznaya, suggesting instead that the terminal be moved to the port of Nakhodka or the Strelok bay. However, Ruksha assured that the terminal would be environmentally safe, "as it will be fitted with effective waste disposal equipment that has already been tested in similar terminals in Novorossiisk and Primorsk." The 4,118-kilometer (2,559-mile) pipeline will run from Taishet in Siberia's Irkutsk region to Perevoznaya, with 44 oil-pumping stations in between, and could transport up to 80 million tonnes a year for shipments to China, Japan, South Korea, Indonesia and Australia. The project is estimated to cost 15 billion dollars (nine billion euros) although some analysts have forecast a price of 16 billion dollars and possibly more. Japan and China -- both starving for future energy supplies -- have fought furiously for the right to access Russia's untapped oil reserves. Tokyo won the upper hand after a protracted diplomatic battle when the Russian government late last year sided with the more expensive but potentially more profitable Pacific coast option. Tokyo has offered to provide seven billion dollars in soft loans for the pipeline and make further investments in Far Eastern Russia, which has been shunned by Japanese companies because the two nations have yet to sign a peace treaty ending World War II due to a lingering border dispute. vn-cal/bm

YUKOS to deliver 250,000 tons of oil to China

 RBC, 25.02.2005, Moscow 16:03:03.YUKOS aims the transportation of 250,000 tons of oil to China in March 2005, chairman of the board o directors of the oil company Viktor Gerashchenko told journalists. He stressed that in February the company has met its obligations and transported 250,000 tons of oil to the republic. However, it is more advantageous for the oil company to deliver oil to the domestic market. As head of the tax payments department of the Russian Finance Ministry Alexander Sakovich told journalists, oil export duties could amount to USD102 per ton starting April 1, 2005. Oil export duties earlier hit their record high of USD101 per ton on December 1, 2004. Later it was revised downward and was set at USD83 per ton. Before the end of 2004 YUKOS was the only Russian supplier of oil to China. In 2004 the company transported 5.4m tons of oil to China. Starting November 2004, another Russian oil giant, LUKoil has also started supplying crude to China. Rosneft has begun transporting oil to the republic since February 1, 2005. It is to supply to China-based CNPC 4.2m tons of oil this year.

Transneft to choose auditor

RBC, 25.02.2005, Moscow 14:49:28.The board of directors of Transneft has decided to hold an open tender to choose an auditor for its 2005 financial statements. According to the company, the financial report will be prepared under Russian accounting standards and international accounting standards. The tender's results are expected to be considered by April 22, 2005. The annual meeting of the company's board of directors will discuss the winner in May 2005.

Thursday, February 24, 2005

NORTHERN ROUTE: North European gas pipeline

Gazexport.ru - The so-called Northern Route option, i.e., the North European gas pipeline project, is being reviewed now to deliver natural gas from Russia across Finland and the Baltic Sea to northern Germany and further towards the United Kingdom. Russian gas is expected to be marketed in Great Britain, the Netherlands and in Scandinavian countries. The project also includes offshore pipeline branches to deliver gas to the Kaliningrad Region. The NE system will link Russian gas transportation systems directly with the European gas network.
Gazprom and Neste OY (what is now Fortum) established Nord Transgas OY, a joint Russian-Finnish company, in Finland to carry out a feasibility study for the gas pipeline. Major engineering and consulting companies, such as Geoconsult, Kvaerner, and Ramball, were invited to take part in the effort. An agreement was also reached to draw up a business plan and a fund raising concept.
The preliminary feasibility study reviewed several pipeline options, including those across the Finnish and Swedish territory with possible construction of additional branches to Denmark. It is expected that the line from Vyborg to the German coast will be 1187 km long if the subsea pipeline option is chosen.
An agreement was signed in Moscow in April 2001 with Ruhrgas, Wintershall, and Fortum for a joint study of the NE construction project.During the Russia-EU summit meeting in Brussels on November 11, 2002, the North European pipeline was accepted as priority project within the energy dialog with the EU, which opened an opportunity for European financial institutions to participate in it. The technical and feasibility study confirmed that it is technically possible. The North European gas pipeline could be used in future as the shortest route for natural gas transportation from the Shtokman Field.
This project means for Gazexport, in addition to increased exports, also higher reliability of gas supply and the possibility to deliver Russian gas directly to a greater number of customers in Western and Northern Europe. Gazexport is currently working on the project in the following areas:
  • marketing research of natural gas markets with the best outlook for gas sales conducted jointly with prospective partners in the project and with outside consultants (Pace Global and Accenture);
  • criteria are being developed for foreign companies to enter the project and relevant talks are being held with potential partners on terms and conditions of their participation;
  • commercial terms of the project are being discussed with foreign partners..
In November 2002 at the Gazprom Board meeting a resolution bearing on the North European gas pipeline project implementation measures was passed. The action plan and schedule were approved. Talks are being held with all parties concerned to coordinate joint activities.
At the initial stage, gas for the North European pipeline will be taken from Nadym Pur Taz fields (Yamal Nenets Autonomous Region), and later from the Yamal, the Ob-Taz Bay, and from the Shtokman Field. First natural gas is to be delivered in 2007, and the pipeline will reach its rated capacity in 2009.

Tuesday, February 22, 2005

Russia to start building major Far East oil pipeline in summer

HOT 02.22.2005 Agence France-Presse - VLADIVOSTOK, Russia, Feb 22 (AFP) - Russia will beginning building a vital pipeline from Siberian oil fields to the Sea of Japan in summer, the Primorye region's deputy governor said Tuesday. "The pipeline's construction is due to begin this summer, on both ends at once -- in Taishet and the Perevoznaya bay" on the Sea of Japan, Viktor Gorchakov told the chief of Russia's sea and river transport agency, Vyacheslav Rukhsha. An oil terminal in Perevoznaya would be one of the first to be built, and would be supplied with oil by railway until the pipeline is complete, Gorchakov explained, adding that Russia planned to start shipping oil from Perevoznaya by September. The 4,118-kilometer (2,559-mile) pipeline will run from Taishet in Siberia's Irkutsk region to Perevoznaya, with 44 oil-pumping stations in between, and could transport up to 80 million tonnes a year. The project is estimated to cost 15 billion dollars (nine billion euros) although some analysts have forecast a price of 16 billion dollars and possibly more. Japan and China -- both starving for future energy supplies -- have fought furiously for the right to access Russia's untapped oil reserves. Tokyo won the upper hand after a protracted diplomatic battle when the Russian government late last year sided with the more expensive but potentially more profitable Pacific coast option. Tokyo has offered to provide seven billion dollars in soft loans for the pipeline and make further investments in Far Eastern Russia, which has been shunned by Japanese companies because the two nations have yet to sign a peace treaty ending World War II due to a lingering border dispute. However, ecologists furiously oppose the project, saying that placing an oil terminal in Perevoznaya could endanger the nearby national parks sheltering the last of the Far East leopards, as well as Vladivostok itself. Experts from the WWF environment protection fund have suggested the existing port of Nakhodka to provide the pipeline's access to the sea. vn-cal/pvh

Monday, February 21, 2005


ASTANA, February 21 (RIA Novosti) - Kazakh government might decide to increase the capacity of an oil pipeline managed by the Caspian Pipeline Consortium (CPC) up to 68 million tons per year as early as on March 1, announced on Monday Kazakh Energy and Mineral Resources Minister Vladimir Shkolnik during his speech in the lower chamber of the Kazakh Parliament. "On March 1, a large representative forum, with participation of Russian Energy Minister Viktor Khristenko and all CPC shareholders will be held in Astana. During the forum, we will adopt a final decision on the increase of CPC oil pipeline capacity," he stated. The Kazakh minister said that the increase of the CPC oil pipeline capacity was necessary due to the expansion of the second stage of the Tengiz field. "The field will see the increase of oil production output up to 20-30 million tons, the surplus oil will have to be transported somewhere else and we do not have an alternative other than increasing the capacity of the CPC pipeline," Mr. Shkolnik said. In addition, the Kazakh minister said, "we have to expand the CPC in order to make it profitable as soon as possible." Mr. Shkolnik noted that "there are strict requirements on the part of the Russian Federation, which owns 24% of the CPC stock, in terms of the increase of CPC oil transportation costs." At the same time, the minister stressed, "Kazakhstan is not particularly interested in doing it." "On the one hand, we own 19% of the CPC stock, but on the other hand we own 20% of Tengizchevroil (a company that conducts oil exploration at the Tengiz field). Therefore, we act simultaneously as consignors and transporters of goods," Mr. Shkolnik explained. The Kazakh energy minister said that "we have reached a consensus on this issue." The present capacity of the CPC pipeline is 28 million tons per year. The CPC was founded in 1992 by the governments of the Russian Federation, Kazakhstan and Oman. At present, 50% of the CPC capital belongs to foreign companies that are on the top ten list of global oil producers. The consortium was primarily formed to transport crude oil from the Tengiz oil field and neighboring oil fields in Kazakhstan and Russia to a newly constructed Novorossiisk-2 Marine Terminal on Russia's Black Sea coast.

Wednesday, February 16, 2005

Transneft Rules Out Pipeline From Surgut

Melissa Akin and Dmitry Zhdannikov - Reuters Vedomosti - LONDON - Transneft has ruled out a pipeline project from Siberia to the Barents Sea but could build a shorter and less costly link from northern Russia, the company's head said Tuesday. Transneft president Semyon Vainshtok told reporters his company was talking to LUKoil about building a $6 billion, 500,000-barrel-per-day route from the country's northern fields to the Barents Sea. That is half the price tag of a proposed route from Surgut in western Siberia's oil heartland to the northern port of Murmansk, Vainshtok said. "The route to Murmansk has no future, but we are currently discussing with LUKoil a different project, Kharyaga-Indiga," Vainshtok said on the sidelines of a conference in London. "It would allow more crude to be exported from the Timan-Pechora region, as well as free up our traditional export destinations [on the Black and Baltic Sea] for more oil from West Siberia," he said. Russia's oil output has risen by more than 50 percent since 1999, and the world's No. 2 oil exporter is struggling with pipeline bottlenecks, prompting its majors to use more expensive alternative export routes, such as the railways, to boost shipments amid flat domestic demand. Oil majors, including LUKoil and TNK-BP, have offered to build a new link from Siberia to Murmansk to ship 2 million bpd to European and U.S. markets. But Transneft has repeatedly criticized the project as too expensive and economically inefficient. Timan-Pechora in Russia's north is a region with huge and untapped fields, mainly dominated by LUKoil, which has a strategic alliance with U.S. No. 3 oil firm ConocoPhillips. The two firms plan to produce up to 200,000 bpd in the region later this decade. Kharyaga is a pipeline hub in Timan-Pechora. Indiga is an undeveloped coastal area 500 kilometers from Kharyaga. Vainshtok said the new project would have to wait until Transneft builds its top-priority pipeline to the Pacific coast. "To build it by the end of this decade may be a too optimistic forecast," he said. The government gave in December a final go-ahead to the plan to construct a $11.5 billion, 1.6-million-bpd link, which would be the country's first pipeline to Asia with access to lucrative markets in Japan and the United States. The project was chosen after long debates over the two proposed routes, to the Pacific coast and to China. But Vainshtok said Tuesday that the plan to supply China with crude could still survive, as the monopoly was considering splitting the link into two sections, with 1 million bpd going to the Pacific and up to 600,000 bpd going to China. Yukos was planning to build a similar pipeline to China earlier this decade, but the plan collapsed after the firm's main unit was renationalized last year in a move seen as Kremlin retribution for the political activities of Yukos' shareholders. Russian Railways has since designed a plan under which rail supplies to China would rise to 600,000 bpd by the end of this decade, from around 200,000 bpd this year. Vainshtok did not say whether resurrecting the idea of a pipeline meant the railway monopoly's project would be scrapped. He said the final feasibility study for the pipeline would be ready by May.

Gas Pipeline Launch Delayed to 2010

February 16, 2005 Reuters - Gas monopoly Gazprom plans to launch its North European Pipeline in 2010, CEO Alexei Miller said Tuesday, signaling a three-year postponement of the $5.7 billion project. "The North European Pipeline will be launched in 2010 and, of course, completion of this project will allow us to increase supplies to Germany and other European Union countries," a Gazprom statement quoted Miller as saying. Gazprom is in the midst of f stalled merger with state oil firm Rosneft, which analysts warn may distract the firm from operational projects worth billions of dollars per year, such as commercial development of vast east Siberian gas fields. Gazprom had previously said the pipeline would be finished in 2007, reaching full capacity of 19-30 billion cubic meters per year in 2009. Gazprom is currently mapping out the 917-kilometer segment which runs across Russian territory and developing the South Russian gas deposit, which will supply the pipeline. The pipeline, also known as the North TransGas pipeline, will connect the Baltic port of Vyborg to Greifswald in Germany. The offshore part will be 1,189 kilometers long. Germany, where Miller made his comments, already imports around a third of its gas from Russia and the pipeline will allow the firm to boost exports to a number of European nations. Gazprom is working on the pipeline project with Germany's Ruhrgas, which owns 6.5 percent of the gas giant. Royal Dutch/Shell, Total, Wintershall, BP and Fortum have also shown interest in participating in the project.

New Caspian Pipeline Likely to Cushion Oil Market

Photo from www.usmc.mil16.02.2005 11:43 MSK Associated Press - After two years of construction, workers are welding and testing with water the last few sections of a 1,100-mile oil pipeline that runs from Azerbaijan through Georgia and Turkey. Seven huge tanks that will each hold 1 million barrels of oil have been built just uphill from Iskenderun Bay, where an empty loading jetty is being finished, capping off a $2.9 billion project that is expected to bring a flood of Caspian crude to hungry world markets. The new oil, part of a push to help ease the West's dependence on Middle East crude, is expected to begin flowing in June. But that, experts say, will provide only short-term relief to a world that is gulping down more crude every year and growing increasingly dependent on resources from the unstable Middle East. With oil prices trading around $47 a barrel, "any incremental oil is significant," said David Knapp, senior editor for global oil market analysis at the New York based Energy Intelligence Group. "It doesn't fix the problem, but it does help." The project, however, was begun as part of a far more ambitious endeavor. Four years ago, excited oil officials spoke of bringing the huge riches of the Caspian Sea to Western oil markets, and of finds that could rival the Middle East's production. The drive for alternatives to that region intensified after the 2001 terrorist attacks highlighted potential regional instability. "There is now greater public pressure to reduce dependence on Saudi and Middle East oil," said Manouchehr Takin, an analyst at the London-based Center for Global Energy Studies. The recent surge in crude oil prices, driven largely by concerns about spare production capacity and possible supply disruptions, has also powered a search for new sources. Angola and Brazil are working to exploit deep-water drilling technology to develop oil fields and about a dozen other countries, include Chad and Sudan, are looking to capitalize on new resources. Canada is expanding oil production from thick tar sands, while Mexico is increasing shallow-water drilling. One of the greatest hopes had been the former Soviet Union, which now produces more oil than Saudi Arabia, and especially its Caspian Basin, whose fields are located in Azerbaijan, Kazakhstan and Turkmenistan. The pipeline through Turkey starts in Baku and carries oil from Azeri fields. When the pipeline was being developed in 2001, "there was a lot of excitement that non-Middle Eastern oil, especially from the Soviet Union, would be an alternative source of oil," said Bulent Aliriza, an analyst with the Washington-based Center for Strategic and International Studies. "The hype at the time was that the oil of the Caspian would rival that of the Middle East." Oil companies looked for a way of bringing the oil to Western markets and U.S. officials insisted that for political reasons a pipeline should be built through Turkey, bypassing the Middle East and Russia. But many Caspian estimates proved to be unrealistic, at least in the short term. Experts now say the Caspian should in coming years pump some 4 million to 5 million barrels per day, on par with Iran. Russia itself pumps about as much oil as Saudi Arabia, but in many Western countries there are political fears of being too dependent on Russia. There is also concern that Russia itself will need more oil as its economy becomes more industrialized. At Ceyhan, the new oil terminal is expected to begin pumping 200,000 barrels a day in June and eventually reach 1 million barrels per day by 2010. But with world economies, especially the United States, China and India, booming, oil consumption is also projected to increase sharply, draining excess oil from the markets. Production in the North Sea and North America is expected to begin falling in the coming years, and much of the new non-OPEC oil is projected to just compensate for those declines. "The U.S. in particular would dearly love it if it did not have to rely on countries like Saudi Arabia and Iraq for its oil needs, but there is no way of getting around it," said Michael Ritchie, editor of Nefte Compass, a weekly newsletter on oil and gas in the former Soviet Union. More than half the global reserves are in the Gulf, and the "world will need the oil that is there more than ever," said John van Schaik of Energy Intelligence, an energy publishing company based in New York. Middle Eastern nations in the Organization of Petroleum Countries, led by Saudi Arabia, produce about a quarter of the world's oil and that is expected to grow to 30 percent by 2015. And Persian Gulf oil is among the cheapest in the world to extract. It costs about $12 for the United States to produce a barrel of oil in the Gulf of Mexico, about the same as it costs to produce a barrel in the Caspian. But in Saudi Arabia, where it is easier to drill the oil, a barrel costs only $3 to produce, according to the International Energy Agency.


HOT  MOSCOW, February 16 (RIA Novosti) - Russia must focus attention on energy cooperation with the United States. According to a Lukoil press service report, Vagit Alekperov, Lukoil's president, expressed this opinion at a conference of the Cambridge Energy Research Associates (CERA) held in Houston. "Against the backdrop of global competition between major consumers of hydrocarbon raw materials, i.e., the United States and the countries of the Asian region, the need to develop Russian-American energy cooperation is most pressing," Alekperov said. In his report on prospects for Russian-American energy dialogue, he pointed out "Russia clearly understands now that its reliance on Europe as the only consumer cannot last." In Alekperov's words, for several years now Russian companies have been making trial raw materials supplies to both the West and the East. Thus, last year Russia exported 145,000 barrels of oil a day to the United States, and 216,000 barrels a day to China. "The final choice will be made only when it is clear which of the two directions is better developed from the point of view of pipeline and port infrastructure," Alekperov stressed. In Houston, Lukoil's president made a proposal to build a pipeline towards Murmansk within the framework of a strategic alliance concluded in 2004 by Lukoil and ConocoPhillips (on the establishment of a joint venture for developing the northern part of the Timan-Pechora oil and gas bearing province). In the opinion of Mr. Alekperov and the company's specialists, "the cost of oil transportation by this route to the US eastern coast would be twice lower than oil delivery by the Middle East- Gulf of Mexico route." "By uniting Russia's scientific and industrial potential with the United States' technological and financial potential, we could attain impressive results. Thus far, this scenario has been translated into life only at the level of individual companies. Its implementation on an interstate level would be in our common interests," Lukoil's president said in conclusion.

Wednesday, February 09, 2005

Gazprom considering participation in Iranian-Armenian pipeline project

RBC, 07.02.2005, Moscow 16:25:44. Gazprom is likely to take part in the construction of Iranian-Armenian gas pipeline. Gazprom's Deputy Chairman Alexander Ryazanov pointed out that should the Russian gas holding abstain from participating in the gas pipeline construction, this gas could enter into competition with that supplied by Gazprom via the Blue Stream pipeline. The Armenian government acts as the principal customer to the construction. The principal agreement was signed in Yerevan on May 13, 2004, indicating that the gas pipeline would become operational before January 1, 2007. Armenia will receive the annual volume of 1.1bn cubic meters of gas via the pipeline from Iran. Armrosgazprom, owned jointly by the Armenian government (45 percent), Gazprom (45 percent) and Itera (10 percent), is expected to take part in bidding for its construction and running.

Friday, February 04, 2005


MOSCOW, February 4 (RIA Novosti) - The Russian government's decision to construct a Taishet - Pacific Ocean oil pipeline will make oil delivery to the oil refineries in the Khabarovsk Territory more reliable and will benefit the entire Russian Far East, Rosneft head Sergei Bogdanchikov said during a meeting with Khabarovsk Territory Governor Viktor Ishayev. "As to the possibility of directing the future oil pipeline towards De Kastri in the Khabarovsk Territory, one should keep in mind that this port has an oil exporting infrastructure, and therefore the project' developers should attentively study that variant, taking into consideration that it is 1,000 kilometers shorter than that to the Perevoznaya Harbor in the Maritime Territory," the Khabarovsk Territory press service quoted Mr. Bogdanchikov as saying. The sea terminal in De Kastri can handle 12.5 million tons of oil annually, and it has been designed for building an oil pipeline 600 mm in diameter and 221 kilometers long. On the last day of 2004, Prime Minister Mikhail Fradkov signed a resolution for the creation of an Eastern Siberia - Pacific Ocean pipe system with a total annual capacity of 80 million tons of oil, or 1.6 million barrels a day. The oil pipeline's construction cost is estimated at between $11 billion - $14.5 billion, i.e. between $2.6 million - $2.9 million per kilometer. In accordance with the Russian government's decision of December 2004 after May 1 of this year, raising the construction's economic efficiency may be proposed.

Tuesday, February 01, 2005

Kazakhstan reconstructing gas pipeline

RBC, 01.02.2005, Astana 11:36:35.Kazakhstan has begun reconstruction of the Central Asia-Center gas pipeline, the country's Energy and Mineral Resources Minister Vladimir Shkolnik reported at a government meeting. He commented that the pipeline's capacity amounts to 54bn cubic meters a year. "We are planning to increase the capacity to 100bn cubic meters a year in several stages," the minister added. As Shkolnik detailed, approximately $24m will be allocated from the state budget for increasing the pipeline's transit potential.

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