Pipeliners

YAKUTIA, July 12 (RIA Novosti) - Transneft [RTS: TRNF], Russia's state-run pipeline operator, has invested 160 billion rubles ($6 billion) in the East Siberia-Pacific Ocean (ESPO) pipeline being built to transport crude eastward, the company's president said Thursday. "To date, we have invested 160 billion rubles," Semyon Vainshtok said. The ESPO pipeline project, with a design capacity of 80 million metric tons (588 million bbl) of crude annually, was launched in April 2006 and is set to transit Siberian oil to the Asia-Pacific market. The pipeline will cover over 4,700 kilometers (2,900 miles), and is being built in two stages. At 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 at $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. Vainshtok also said crude from West Siberia would not be pumped through the ESPO pipeline, as East Siberian oil would be enough to fill the pipe. "Fears about fulfilling the pipeline capacity have not materialized," Vainshtok said. "We have already received orders for 36 million tons of oil [264 million barrels] from East Siberia," he said. Vainshtok also said Transneft had already built 1,000 kilometers (621 miles) of the ESPO pipeline, or more than a third of the project's first stage, adding that the company had reached the planned level of building 5 kilometers (3.1 miles) per day. Transneft and Russian energy giant Gazprom have set up a working group to discuss the construction of a gas pipeline along the East Siberia-Pacific Ocean oil pipe project, adding that his company was prepared to provide consulting assistance to the gas monopoly. The construction of a gas pipeline to run parallel to the ESPO project is conditioned by the structure of hydrocarbons at East Siberian deposits that are rich in petroleum associated gas and condensate. Vainshtok also said Transneft would convene a meeting of Caspian Pipeline Consortium shareholders July 19 to discuss issuing $5 billion worth of Eurobonds and raising tariffs. "So far, our proposals have not been accepted, but we will convene an extraordinary shareholders meeting July 19," he said. At a shareholders meeting July 5, Transneft, which holds a 24% stake in the international consortium pumping Russian and Kazakh oil to a terminal on the Black Sea, proposed the Eurobond issue to restructure the consortium's debt. Shareholders are to examine the proposal and make a decision within 10-14 days, but they declined to back the proposed rise in transportation tariffs from the current $24.60 to $38 per metric ton of oil.