 Russia Won’t Provide Government Guaranteed Loans for
Siberian Pipeline Construction |
17.01.2005 18:33 MosNews The Russian government said it will not guarantee any loans for a new pipeline project linking Siberian oil fields with the Sea of Japan. The statement was issued three days after talks on the pipeline between visiting Japanese Foreign Minister Nobutaka Machimura and Russian Deputy Prime Minister Viktor Khristenko, who also heads Russia’s Industry and Energy Ministry. “This is a commercial project, which will be realized through favorable financial circumstances —- both external and internal —- but without the government providing financial guarantees or taking out loans,” said the Energy Ministry’s statement which was released following the meeting. Khristenko said Russia expects “cheap loans from both within and abroad” to build the pipeline. Construction of the pipeline that will run over frozen Siberian terrain is estimated to cost at least $12 billion. The Russian government took more than a year to decide whether to build the oil pipeline from Eastern Siberia to the Pacific Ocean port of Nakhodka or to China’s Daqing. The decision, which favored the Japanese-sponsored Nakhodka route, was finally announced on Dec. 31, 2004 The proposed route of Siberia-Nakhodka oil pipeline / Image by MosNews.com
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| Russia Orders Construction of Siberia-Japan Oil Pipeline |
17.01.2005 18:33 MosNews
The Russian government has signed an order for the construction of an oil pipeline from Taichet, eastern Siberia to the Pacific Ocean to serve Japan, said a source close to the government, cited by financial news agency Prime-Tass. The pipeline will have capacity for 80 million tons, Prime-Tass said. The government press service was not immediately available to comment. For several years, there have been two competing projects to transport eastern Siberian oil to Asia — one to Japan via the port of Nakhodka, and the other to China. Russian officials said in September that the 4,130-km pipeline to Japan, entirely on Russian territory, was the preferred route, but a study on profitability of the project had not yet been undertaken. Chinese authorities said the Russian government had assured them a branch of the pipeline would be built towards China Map of Taichet-Nakhodka area, image from transsib.ru
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| Russian Oil Will Flow To Japan Via Nakhodka |
| 22.03.2004 17:36 MosNews Moscow and Tokyo have reached an agreement on the route along which Russian oil will be transported from Eastern Siberia to Japan, the Reuters news agency reported. The oil pipeline will go from Taishet to the port city of Nakhodka. There will also be a branch leading to the Chinese port of Dacin. Earlier the Russian government considered two alternative routes for oil exports. Japan recommended that the oil pipeline would go along the Angarsk-Nakhodka route with a branch for Dacin. Meanwhile, China insisted on the construction of an oil pipeline from Angarsk to Dacin. The Japanese project was supported by the Russian state-run transportation company Transneft. However, this plan was put into doubt when Russia and China signed a joint declaration about the strengthening of cooperation in the oil and gas sector. The Yukos oil company also lobbied for the Chinese alternative. According to the new project, an oil pipeline more than 4,000 kilometers in length will run through the village of Skovodorino, situated on the border of Inner Mongolia. The branch for the port of Dacin will start there. Japan, which lacks its own natural resources, exports almost all of its energy and fuel from abroad. In 2003 87.1 percent of the country’s oil needs were covered by supplies from the Middle East. The dramatic increase in energy consumption in China has also forced Beijing to actively search for new sources of oil and gas supplies.
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| China Urges Russia to Approve Oil Pipeline Project |
| 08.04.2004 17:02 MosNews In preparation of a visit by China’s foreign minister to Moscow, official Beijing once again urged Russia to approve a long-delayed oil pipeline project which is supposed to connect oil fields in Siberia with industries in China’s northeast. A spokesman from the Chinese Foreign Affairs Ministry, Kong Quan, said on Thursday that there is hope that Russia will approve the project “as early as possible, as it will bring huge economic benefit to both nations”. While it is not clear whether the pipeline construction issue will be discussed during the foreign minister’s visit, approval of the project remains one of the most pressing bilateral issues between Beijing and Moscow. China has been urging Russia to approve the pipeline route through its territory rather than a Tokyo-backed plan to connect the pipeline to a coastal terminal at the Pacific Ocean port of Nakhodka, from where the oil will be shipped to Japan. The Chinese plan was backed by the Yukos oil company, which already exports the majority of its oil to China, while the Japanese plan found supporters in the state company Transneft which owns oil pipelines on Russian territory. As MosNews reported in March, the Russian government seems to have made a decision in favor of the Nakhodka route, although nothing has been announced officially. Although this route is projected to be more costly than a route leading to China’s Daqing, its supporters say that its upside is the encouragement of the development of East Siberia and Far East. The help to these regions is on top of President Putin’s priorities and this may be the reason why he may back this proposal. Meanwhile, Transneft is working on a third version of the pipeline route which may satisfy both China and Japan. The pipeline would originate in the town of Taishet in Irkutsk Region and stretch to the Nakhodka sea port, but with some parts passing as close as 50 kilometers from the Chinese border. In this case “it will be an easy technical task to build a branch into Chinese territory,” said Sergei Grigoryev, vice president of Transneft. |
| Japan Ready to Finance Construction of Oil Pipeline |
| 29.04.2004 14:37 MosNews Japan is ready to invest in the construction of East Siberia — Pacific Ocean oil pipeline, and waits for the Russian government’s decision to already start the construction process. This information was disclosed to Itar-Tass news agency by the Japanese ambassador to Russia, Issey Nomura. The ambassador said that “Japanese business is ready to invest in the project, but the topic of investment is not the most important one”. In his opinion “the money will start flowing after the experts discuss more fundamental questions”. Russian state-owned pipeline operator Transneft which is responsible for the constructions told Itar-Tass that currently the technical and financial details of the project are being cleared out. By the end of the year the project will be handed over for state expert examination. The question of foreign investments will be discussed only after the Russian government makes the final decision to begin construction. Transneft president Simon Vainstock said that his company plans to “attract funds from both Russian and foreign banks” and added that already “the offer of money exceeds the project’s needs”. The length of the oil pipeline from East Siberian town of Angarsk to the Pacific Ocean port of Nakhodka is 4130 kilometers. The projected annual capacity of the pipeline is 56 million tons of oil. |
| Russia not to build an oil pipeline to China |
| 01.03.2004 13:21 Mosnews Information Service The Russian government and President Vladimir Putin seem to have finally made a choice between two oil pipeline construction projects that have been in the works for the last two years. Both of the projects were to be originated in Easter Siberia, but one of them was supposed to lead to China’s Daqing, while another to the Pacific coast — and from there on to Japan. The decision has not been officially made yet, and probably won’t be until after the March 14 presidential elections. However, acting Russian Energy Minister Igor Yusofov already hinted that the government was close to approving the northern Nakhodka route rather than southern Daqing route. Speaking to reporters Yusofov said that “we’re close to a decision [and] there are no politics involved, it is now going to be a purely economy decision.” He also pointed out that China can get the oil “through the port in necessary” adding that construction will take five to six years. However, the analysts already criticize this decision, stating that the Nakhodka route will cost more, will take more years to build and may cost Russia good relations with China. As Paul Collison, an analyst with the Brunswick UBS investment company, told Prime-TASS economic news agency, “the China project is much more reasonable and profitable. And it is unlikely that they [the Russian government] can afford both pipelines”. The project to link Russia’s Eastern Siberia and its oil reserves with the Pacific Ocean has been in the government’s consideration since 2000. The alternative route to Nakhodka led to the possibility of exporting Russian oil to Japan and other Asian markets, while the route leading to Daqing was a way to satisfy China’s energy demands. The Russian government has been jumping back and forth between the two alternatives, even talking of merging both projects together so to satisfy both Japan and China. However, the industry analysts say that Russia simply lacks sufficient oil to meet the demand in both countries. Those who support the plans to build the pipeline to Nakhodka say that the project, although considerably costlier, would encourage the development of Eastern Siberia and the Far East, which is on top of the list of President Putin’s priorities. It is also expected to attract substantial Japanese investments in the region and generally help Russian-Japanese relations. The proponents of the Nakhodka route also point out that a coastal location will allow Russia to sell oil to anybody in the region including China, Taiwan and the U.S. Meanwhile the proponents of the China route are weakened by the politically unstable position of Yukos, which is Russia’s only major oil exporter. The sources inside the industry say that Yukos will not be able to influence the government’s decision, however it will still be allowed to export oil to China by rail. The authorities are also considering exporting oil to China through Kazakhstan. Reportedly Yukos and China National Petroleum Corporation (CNPC) are also working on an alternative plan which will allow the delivery of 10 million tones of oil annually starting in 2006. All in all analysts agree that if the decision is indeed made to drop the Daqing route altogether, China will not get Russian oil via a pipeline before 2009-2010, while if the Daqing pipeline were to be build, Russian oil could have started flowing to China as early as 2007.
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