Russia's East Siberia-Pacific pipeline weeks away from China

07 April 2009

The Russian state oil pipeline company Transneft is just weeks away from taking the East Siberia-Pacific Ocean (ESPO) oil pipeline to the Chinese border, Russian Prime Minister Vladimir Putin told the lower house of the Russian parliament.

In February this year, Russia and China signed an intergovernmental agreement for Russia to supply China with 15 million tonnes of oil (300,000 barrels per day) annually for the next 20 years in exchange for a $25-billion loan to Russian companies Transneft and Rosneft for pipeline and oil fields development (See: China, Russia sign $25-billion loan-for-oil deal). 

"In a few weeks, the phase of the pipeline, which will reach the Chinese border will be completed and then we will advance to the Pacific Ocean," Putin told the state Duma, reports Russia's Interfax news.

It also reported Putin having said that excluding Russia from the global energy decision making would be counterproductive, referring to the Ukraine-EU declaration on modernising the gas transport system that carries Rusian gas to Europe via Ukraine's pipelines. The EU-Ukraine accord could trigger a retaliatory price revision by Russia and impact natural gas production in Central Asian.

"We are sure that new energy transportation routes being developed by Russia, such as Nord Stream, South Stream, the Caspian Gas Pipeline and the Burgas-Alexandroupolis oil pipeline are economically viable and would continue to implement them," he said.

 Transneft is one of the largest networks of oil pipelines in the world which transports about 93 per cent of the oil produced in Russia. It operates a transportation network comprising over 30,000 miles of pipeline, about 390 oil refilling (pump) stations, and more than 830 reservoirs capable of storing more than 15 million cu. meters of petroleum products.