Eric Watkins
Middle East Correspondent
NICOSIA, May 30 -- Russian President Vladimir Putin appears to have played down a request by Japanese Prime Minister Junichiro Koizumi on Friday for the construction of a Siberian oil pipeline along a route proposed by Japan, rather than one proposed by China.
On a state visit to Russia, Koizumi—who wants to reduce his country's near-total dependence on Middle Eastern oil—said he repeated the request he made in January for a Russian pipeline favorable to Japanese interests. But Japanese officials quoted Putin as agreeing only to give the matter "serious" consideration.
"Some say that the Chinese route can be built quicker and cheaper. But we have to give serious consideration to the importance of developing undeveloped natural resources in Siberia and the need to seek a larger market, which would include the Asia-Pacific region," a Japanese official quoted Putin as telling Koizumi.
Japan has been lobbying Russia to build a pipeline from the Siberian city of Angarsk to Nakhodka, a port city in the Russian Far East region on the Sea of Japan coast, instead of one from Angarsk to the Chinese industrial city of Daqing.
Japan shut out
Japan appeared to have lost the contest earlier this week with the announcement that Russia and China had signed a declaration saying they would strengthen cooperation in the oil and gas sectors, including construction of the 2,400 km Angarsk-Daqing pipeline.
Russia's OAO Yukos and China National Petroleum Corp. (CNPC) signed a general agreement on Wednesday concerning the main principles and understandings for a contract to supply oil to China via a Russia-China oil pipeline.
The agreement was signed by Yukos CEO Mikhail Khodorkovsky and CNPC Pres. Ma Fucai, who accompanied Chinese President Hu Jintao on a state visit to Russia. Ma said supplies would commence in 2005, with 20 million tonnes/year to be supplied for the first 5 years and 30 million tonnes/year for 25 years beginning in 2010.
But the agreement does not rule out the possibility that Japan will eventually see the pipeline it needs to reduce its imports of Middle Eastern supplies.
Russian Deputy Prime Minister Victor Khristenko last week said his country's energy strategy to 2020 calls for the construction of the Angarsk-Nakhodka pipeline with a capacity of 50 million tonnes/year of oil. He said the project also involves construction of a "branch" of the pipeline to Daqing with capacity of 30 million tonnes/year.
Energy Minister Igor Yusufov told journalists Thursday that feasibility studies for the Angarsk-Nakhodka and the Angarsk-Daqing pipelines would be put on a list of priority measures. "Priority will be given to the most economically effective and achievable projects," he said.
Even China's official Xinhua News Agency reported that Russia "has decided to build a key oil pipeline from Angarsk in Western Siberia to Nakhodka in the Pacific coast on the Sea of Japan, with a 2,400 km separate branch going to the northern Chinese city of Daqing."
Decision made, dependence strong
Very clearly, however, the Russians have decided to build the Daqing spur before they take on the main construction on to Nakhodka, Russian news agency Interfax reported last week. "The timely implementation of the Angarsk-Daqing project will make it possible to start prospecting for new fields in the Far East and Eastern Siberia in 2005-07, and begin construction of the Angarsk-Nakhodka pipeline after 2015, if reserves exceed 2 billion tonnes," the agency said.
Meanwhile, recent oil import statistics suggest that Japan will doubtlessly continue to push Russia hard for an early start to the projected extension of the pipeline beyond Daqing all the way to the Pacific Coast.
On Friday, Japan's Ministry of Economy, Trade, and Industry said the country's crude oil imports in April rose 15.1% from a year earlier to 21.4 million kl, or 4.49 million b/d, with 4.1 million b/d coming from the Organization of Petroleum Exporting Countries. More worrisome, Japan's reliance on Middle Eastern crudes was 90.3% in April, up 1.8 points from a year before and slightly elevated on a dependence of 89.6% in March.
