Pipeliners

28.02.2006 MosNews - Environmental pressure group Greenpeace urged foreign banks on Tuesday, Feb. 28, against funding Russia's project to build an oil pipeline from Eastern Siberia to Pacific Ocean coast. Greenpeace warned the bankers they might face liabilities for ecological damage. Russian pipeline monopoly Transneft plans to build an $11.5 billion, 1.6 million barrel-per-day pipeline to China and Japan. The pipeline, due to run from East Siberia to the Pacific coast, should be built by 2008. The project has the full backing of President Vladimir Putin as it would allow Russia to diversify its massive energy exports away from Europe's slow-growing markets. While the results of the final ecological study on the project have yet to be published, Transneft is already seeking foreign loans to fund the project. Greenpeace said the pipeline's proximity could place Baikal, the world's largest freshwater lake, at risk. "We understand that financial participation in an $11-billion-plus project may be regarded as a significant business opportunity," Greenpeace Russia said in an open letter to several international banks. The letter was quoted by the Reuters agency. "However, we are confident you and your colleagues will wish to take full account of all legal breaches associated with this project, to weigh the risks of potential court-ordered reviews or revisions and of future liability for damages in the event the project proceeds," it went on to say. Baikal is the world's deepest lake and home to hundreds of endemic species, including a rare fresh-water seal. Russia's business daily Vedomosti quoted a source close to Transneft as saying the company needed around $2 billion in loans to fund construction works this year alone. Transneft President Semyon Vainshtok threatened last month to sue ecologists and state watchdogs if they rejected a plan to build the pipeline. Adding to Transneft's woes, Russia's state transportation monopoly the Russian Railways has urged the government on Monday, Feb. 27, asking it to consider whether its massive crude oil shipments to China would survive when the country builds its first pipeline to Asia. The railways have invested hundreds of millions of dollars to expand links and boost supplies to China to 300,000 barrels per day by the end of this decade from just 100,000 barrels per day several years ago. But the projects rely on West Siberian crude production as reserves of the East Siberian fields are yet to be confirmed, while experts say the country might lack enough crude to fill both projects or even fully fill the pipeline alone.