Pipeliners

19 July 2007 - Upstream OnLine - Russia is on track to open the first 600,000 barrels per day phase of its Asian pipeline next year, but it is unlikely to expand the lnk to its full 1.6 million bpd capacity before 2015 or 2017, Deputy Energy Minister Andrei Dementyev said today. Dementyev told a government meeting that Russia needs to discover more oil in East Siberia to justify the expansion of the pipeline, but once done, it would secure an important share of the Asian-Pacific market. "The Russian share of this market could exceed 6%," Reuters quoted him as saying. Russia hopes the Asian pipeline will make its exports more flexible, but pipeline monopoly Transneft, which is building the $11 billion link, said today that the pricing impact was unlikely to be big. The head of Transneft, Semyon Vainshtok, told the meeting most crude for the Asian pipeline will come from East Siberia, while West Siberian oil will continue flowing toward Europe. "We won't be able to reduce flows to Western Europe and force them to scrap discrepancies in the pricing of (Russia's mainstay oil export blend) Urals," he said. President Vladimir Putin has repeatedly asked the government and oil producers to take steps to sell Urals at a smaller discount to the international benchmark Brent, which is based on North Sea oil grades. But all attempts, including a trial bourse for Russian crude, have so far failed, Reuters said. The first phase of the Asian pipeline had been meant to supply China, but Vainshtok said last week Russia could equally split oil between China and other Asian markets by re-exporting 300,000 bpd from a terminal on the Pacific.