Pipeliners

05-26-2009 - Upstream OnLine - Russia is set to start work on a new oil link to the Baltic Sea next month, pipeline monopoly Transneft said, launching a project that will allow Moscow to bypass Belarus. Transneft first proposed expanding the Baltic Pipeline System to Ust-Luga, near the Russian port of Primorsk, after a dispute with ex-Soviet neighbour Belarus disrupted oil flows to Europe via the Druzhba pipeline in 2006. "We plan the first welding on the pipeline on 10 June," Transneft spokesman Igor Dyomin told Reuters. Work had already begun to pave the way for the pipeline through the forest, he said. The new pipeline, known as BTS-2, will have capacity of 1 million barrels per day and is an extension of the existing Baltic Pipeline System. It will include a spur to feed crude to Surgutneftegaz' Kirishi refinery. The first phase of BTS-2 is due to be completed in September 2012. Russi is also building a pipeline to its Pacific coast to move oil from huge new fields in eastern Siberia to energy-hungry Asian markets, a move that will diversify Moscow's energy reach beyond its traditional markets in Europe. Initial estimates for the cost of BTS-2 were around $2 billion, but Transneft's latest estimate last June was for 120 billion roubles ($3.9 billion).