Building a world of
resilient communities.

MAIN LIST

 

Russia greenlights pipeline to Pacific, hints China may get Yukos assets stake

MOSCOW: Russia said Friday it had ordered the construction of an oil pipeline from its huge Siberian oilfields to the Pacific Ocean opposite Japan, in a move to boost export opportunities throughout East Asia and to the United States.

A "system of pipelines" with an annual capacity of 80 million tonnes would be built from Taishet in Siberia to Perevoznaya near Vladivostok and the eastern port of Nakhodka, the government said in a statement.

Energy-thirsty Asian rivals Japan and China have been furiously competing for several years for access to supplies from the world’s second biggest oil exporter after Saudi Arabia.

But the 4,130-kilometre (2,560-mile) link to Nakhodka becomes the preferred option earlier this year after lengthy talks with Tokyo, which has said it, would finance its construction.

No price tag was put on the project Friday, but Russian officials have said previously it would cost some 16 billion dollars or almost seven times the cost of the alternative option to China.

Moscow’s decision to pump its vast eastern Siberian oil supplies towards Japan will come as a blow to China, whose energy-hungry economy has turned it into the world’s second largest oil consumer after the United States.

Negotiations with China were complicated by environmental concerns, with neither side able to agree on the route. For Russia, the Pacific route means that besides Japan, it could supply oil to other countries in the region, including South Korea, and even, potentially, the west coast of the United States.

Officials in Beijing have raised the possibility that a branch of Russia’s Pacific pipeline could be diverted eventually to China, where energy demand continues to outpace supply, although there was no mention of this in Friday’s statement from Moscow.

But in a major sweetener for Beijing, Industry and Energy Minister Viktor Khristenko on Thursday announced that Chinese oil conglomerate CNPC could be offered up to 20 per cent of the main asset of the dismembered Russian energy supplier Yukos.

In what would amount to a strategic energy tie-up between Russia and China, Khristenko said China National Petroleum Corporation (CNPC) could end up owning a significant chunk of the assets of Yuganskneftegaz, which pumps a million barrels a day and owns 17 per cent of Russia’s oil reserves.

Moscow has signed agreements with CNPC reflecting bilateral "strategic understandings" on the expansion of energy cooperation, deemed vital to long-term economic growth in both countries, he said.

Editorial Notes: Original title: "Russia orders oil pipeline to Pacific" -LJ

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Start your own projects. See our RESOURCES page.
Make connections via our GROUPS page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


The Great Game in the Holy Land

Guess what? Almost all the current wars, uprisings, and other conflicts in …

North Dakota Considers Weakening Standards on Radioactive Drilling Waste as Oil Prices Collapse

As the collapse of oil prices threatens North Dakota's shale drilling rush, …

Peak Oil Notes - Feb 26

A mid-week update. Oil prices fell on Monday and Tuesday this week on …

Is the US Overplaying Its Energy Hand?

The evidence suggests the United States is playing energy poker with a pair …

Are We In The Midst Of An Epic Battle Between Interest Rates And The Oil Price?

What follows are the continuance of my research, discussions, observations …

Quakes in Gas Fields Ignored for Years, Dutch Agency Finds

A report from the Dutch Safety Board has accused the oil and gas industry …

Peak Oil Review - Feb 23

A weekly review including Oil and the Global Economy, The Middle East & …