Pipeliners

Sept 28 (AFP)Agence France-Presse - BEIJING - China's first private pipeline for importing oil from Russia is expected to be completed and begin operation next year, state media said Wednesday. The 30-kilometre (20 mile) pipeline, which will link the Chinese city of Heihe in northeast Heilongjiang province and the Russian city of Blagoveshchensk in Siberia, is expected to be completed by next September, the China Daily said. Construction is scheduled to begin this month, earlier media reports said. The 64 million dollar line will pump some three million tonnes of oil annually from Blagoveshchenk to Heihe and could reach its full capacity of five million tons by the year 2008. The oil will be transported to Blagoveshchensk and out of Heihe by train, it said. The volume is a mininiscule amount compared to the more than 300 million tonnes China guzzles a year as the world's second largest oil consumer after the United States but the rapidly industrializing country is eager to get any oil it can. China had earlier pinned its hopes on Russia agreeing to build a much longer and more expensive pipeline to transport oil from Siberia but later faced intense competition from Japan, which offered to pay for much of a pipeline carrying oil to a Pacific coast port. At the end of 2004, Moscow said the pipeline would be built from Taishet to Perevoznaya Bay on Russia's Pacific coast and that a spur would later be built to refineries in China's Daqing, also in Heilongjiang. The China Daily quoted experts as saying that given the lingering uncertainty of where Russia will build the larger pipeline, the construction of this smaller pipeline may be a good way to relieve oil transportation bottlenecks between China and Russia. Most of the investment for the private pipeline is to be paid for by Xinghe Industrial Development, the Chinese operator of the pipeline, while the Moscow-based Russian Lanta Oil Co. will pay for the remainder. "With the geological advantages, the pipeline we are building would be a speedy and convenient shortcut to transport oil from Russia," said Tao Ran, general manager of the Heihe-based Xinghe. The project will include a railway unloading area and oil transfer station in Blagoveshchensk, four pipelines crossing beneath the Heilongjiang River and another oil transfer station and railway loading area in Heihe. The oil will mainly be provided to users in Heilongjiang province.

30.09.2005 SKRIN - News - Key Ministers of Russia and Greece will discussed outlooks of Burgas-Aleksandrupolis oil pipeline at the intergovernmental Russian-Greek Commission to be held on 27-30 September in Moscow. According to Evripidis Stilianidis, Greece Minister of foreigner affairs, this meeting is sequential political initiative adopted by the Greek government in the Black Sea region, particularly in Russia, in the course of the official visit of Kostas Karamanlis, Greece Prime Minister, to Russia and his meeting with the President Vladimir Putin.
This oil pipeline is a pipeline of a very strategic importance for all countries participated, deputy Minister emphasized. This is additional decision with regard to the Black Sea's straights. Not to dictate the competitiveness to straights but to sufficiently unload and protect them is the aim of this pipeline. This project is very helpful for the environment and it decreases possibility of accidents and therefore straights pollution. It very profitable and efficient since secures safety, quickness and cheapness of oil transportation from Russia, the Black and Caspian Seas' basin to the West market, according to www.Transneft.Ru

Moscow, September 29 (RIA Novosti) - The Russian Natural Resources Ministry said Thursday that the feasibility study for the Eastern Siberia-Pacific Ocean oil pipeline project, which is to link Eastern Siberian deposits with the Pacific port of Nakhodka, was illegal because parameters for research had been changed after being approved. "The work that the feasibility study covers, particularly the construction of a section of the 800 meters off the coastline of Lake Baikal, was not previously approved by the State Environmental Appraisal Committee," the ministry said. The committee already approved documents that stated that the pipeline would be built beyond the boundaries of Baikal's drainage basin, which prompted the government to allow the further engineering and construction of the pipeline. However, the law on environmental appraisal stipulates that if a feasibility study is amended after being approved, the committee's conclusion becomes void and a new appraisal is needed. The ministry said if the pipeline was built within the basin, the lake's ecosystem might suffer serious damage in the event of oil spills. Lake Baikal is the oldest and deepest lake in the world that UNESCO declared a world heritage site in 1996. The ministry also said the location of an oil terminal had not been chosen and that the issue must be solved at this stage in accordance with environmental requirements and the relevant documents submitted to the environmental appraisal committee. The 4,188-kilometer Eastern Siberia-Pacific Ocean pipeline will cost $11.5 billion and will have a targeted annual capacity of 80 million metric tons. The first segment of the pipeline will be ready by 2008.

ST.PETERSBURG, September 27 (RIA Novosti-Northwest, Olga Vtorova) - Some $24.5 million will be invested in the construction of the North European gas pipeline in 2006, a board member of Russian natural gas monopoly Gazprom told journalists Tuesday. Valery Golubev, participating in a round table on Gazprom's investment program, said there were plans to build a 144-km-long piece of the 500-km land section of the pipeline in 2006. "A special commission, registered in Switzerland for tax optimization, will be established to deal with the construction of the gas pipeline's marine part," Golubev said.

IRKUTSK, September 21 (RIA Novosti) - The decision on whether eastern Russia and China or European Russia will receive Kovykta's natural gas (Siberia) supplies will depend on the prospects of sales, the Russian economy minister said Wednesday. German Gref said this following a conference on the destination of the natural gas produced at the Kovykta field, 450km northeast of Irkutsk. Gazprom spoke in favor of European Russia, where the national gas pipeline system is situated. "Gazprom has been offered a 50%-share in the project," Gref said. The Kovykta natural gas field has an estimated capacity of 1.9 trillion cu m. Rusia Petroleum, a TNK-BP subsidiary, has the license to develop the gas field. Gref said he had not determined his stance on the issue yet. "It [his position] will hardly depend on subjective factors. It will rather be based on sales prospects," the minister said. "If it is China or Korea - fine. If it is the domestic market - even better." Gazprom's argument is that in eastern Russia, Kovykta gas will hardly be able to rival gas produced on Sakhalin in terms of prices. "Sakhalin gas reserves were underestimated, they are much bigger, and investors now intend to increase the capacity to 50-55 billion cu m, instead of the earlier estimated 30 billion cu m," Kirill Androsov, the head of a ministry department said. Gref also said he hoped Russia would suffer no gas shortages. "However, Gazprom will have to meet substantial obligations to increase exports in 2010," he said, adding it would require a surge in gas production.

BEIJING, September 21 (RIA Novosti, Alexei Yefimov) - Russian natural gas monopoly Gazprom is considering building two possible pipelines to eastern and western China, the head of the company's export subsidiary Gazpromexport said Wednesday. "Gazprom is considering both options and the issue of priorities has not yet been decided," Alexander Medvedev said at a press conference in the Chinese capital. The eastern pipeline would be built from the Maritime Territory in the Russian Far East. The western pipeline would cross the Chinese border from the Russian region of Altai. "The eastern and western projects are being closely analyzed by Chinese and Russian experts," he said. A decision on the construction of the pipelines could be made after the Federal Program for the Development of the Far East and Eastern Siberian has been approved, most likely by year's end, Medvedev said.

05.09.2005 MosNews - China will start construction of the country's first private pipeline to import oil from Russia as early as this month, the China Securities Journal reported on Monday, Sept. 5. The newspaper said the 30-kilometer pipeline, with an estimated investment of 520 million yuan (about $65 million), will link railway lines between the northeastern city of Heihe in China's Heilongjiang province and Siberia's Blagoveshchensk in Russia. It said its first stage transmission capacity will reach three million tons annually. "We aim to provide a conduit for companies that have oil import and export rights...it's just like building a highway where we collect the tolls," Hao Chunli, deputy general manager of Xinghe Industrial Development Co Ltd, the Chinese operator of the pipeline, was quoted by the newspaper as saying. Xinghe Industrial will invest 342.33 million yuan ($43 million) in the pipeline, while the Russian partner will contribute the remaining 170 million yuan ($22 million) the Heihe municipal government said on its website. The newspaper said the pipeline begins in Blagoveshchensk where there will be an oil storage facility with a capacity of 24,000 tons, and ends at Heihe where an oil storage facility with a capacity of 60,000 tons will be built. Current oil trade between China and Russia relies mainly on railway transport, but it is hampered by the fact that Russian railroads need modernization and there is an acute shortage in the oil terminal capacity. MosNews has already reported that Russian oil exports to China are threatened by railroad oil terminal bottlenecks, and that neither the oil companies nor the transportation monopoly Russian Railways are willing to invest funds for an upgrade.

HOT MOSCOW, September 6 (RIA Novosti) - E.ON AG, the world's biggest private energy and gas concern, will get a 24.5% stake in the authorized capital of a joint venture set up to build the North European Gas Pipeline but will not be involved in the development of the Yuzhno-Russkoye natural gas field, a leading Russian business daily reported Tuesday. Kommersant wrote that Gazprom chief executive Alexei Miller, the Chairman and CEO of E.ON, Dr. Wulf Bernotat, and the chairman of oil producer BASF Wintershall, Jurgen Hambrecht, would sign an agreement on the terms of financing the pipeline on September 8, during Russian President Vladimir Putin's visit to Germany. A source close to the talks said a joint venture would be set up within months through the establishment of authorized capital. Gazprom will provide 51% and E.ON and BASF, 24.5% each. According to the paper, the pipeline, which will cover 1,187 kilometers (about 750 miles) and cost $5.7 billion, will be laid to Europe along the bottom of the Baltic Sea. First discussed in 1997, the idea was as an alternative natural gas route to Germany, Scandinavia and Britain. Its design capacity will be up to 55 billion cubic meters a year. Until yesterday, Gazprom had only one strategic partner in the project. In April, it signed a package agreement on the transfer of a 49% stake in the venture to BASF Wintershall. It also stipulated the exchange of 15% of Wingas (a subsidiary of BASF) shares for a 50% stake Severneftegazprom, a regional oil company in Russia that holds the development license for the Yuzhno-Russkoye deposit in Western Siberia. Located on Yamal Peninsula in the north of western Siberia, it has reserves of 700 billion cubic meters of gas and will be the main provider for the European pipeline. In return, Gazprom is to get access to the end users in Germany and a share in BASF energy projects, the paper said. That agreement spurred E.ON to action. The above source said that no other foreign company could hope to participate in the project now. E.ON's participation in the development of Yuzhno-Russkoye is not stipulated in the agreement, which means that Gazprom has not received everything it wanted and talks will continue. A source close to Gazprom's management said E.ON would not be allowed to dip into the pipeline's raw materials base, the paper said.

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