Eric Watkins
Middle East Correspondent
NICOSIA, Oct. 20 -- Japanese Prime Minister Junichiro Koizumi and Russian President Vladimir Putin have agreed to speed up discussions among experts over the feasibility of laying an oil pipeline between Russia's eastern Siberian oil fields and its port of Nakhodka on the Pacific Coast.
Even as he made the announcement, however, the Russian leader remained publicly uncommitted to any particular pipeline route and offered assurances that his country will continue to honor its promises of increased exports of oil to China.
In a meeting held before the start of the 2-day Asia-Pacific Economic Cooperation summit in Bangkok on Monday, Putin and Koizumi also agreed that Russian Prime Minister Mikhail Kasyanov will visit Japan in mid-December as part of the pipeline negotiations.
A working group comprising energy experts from both governments began a first round of monthly talks on Aug. 1 in Moscow, a Japanese government official confirmed on Monday.
He said at least two more rounds of talks are planned in Moscow to discuss the East Siberian oil project before the Russian prime minister visits Tokyo.
Main issues explored
The experts are examining three main issues involving the project: exploration and development of oil fields needed to provide production to fill the pipeline, a feasibility study, and project financing.
The agreement between Koizumi and Putin to accelerate discussions has been made with a view to boosting hopes of reaching an agreement on funding ahead of Kasyanov's planned visit.
Contradicting earlier denials, Jiro Okuyama, a spokesman for the Japanese premier, said Japan may contribute $5-7 billion to the project if the pipeline terminates on the Pacific coast (OGJ Online, Oct. 13, 2003).
Russia and China agreed in 2001 to build an oil transmission pipeline from Angarsk, near Lake Baikal in eastern Siberia, to the industrial city of Daqing in northeast China.
But several Russian oil companies proposed a new plan late last year to ship oil from Angarsk to Nakhodka. Koizumi pressed for the new plan on a visit to Moscow last January, and a stream of Japanese dignitaries have continued to lobby for the line since then.
Swayed by the potentially large Asia-Pacific market for its oil exports via Nakhodka, Moscow last March decided on a compromise plan, consisting of a main pipeline from Angarsk to Nahodka and a spur to Daqing.
Upon completion, the proposed pipeline will be have a capacity of 100,000 b/d of crude oil to Japan and South Korea and another 60,000 b/d to Daqing by 2010.
Despite the apparent change in their commitment over the pipeline, Russian officials have continued to assure China that it will honor the agreement to provide increased supplies of oil. On Sunday, Putin renewed that promise, saying increased supplies to China can be met either by laying a direct pipeline toward the town of Datsin, by constructing a spur to Daqing off the Angarsk-Nakhodka pipeline, or simply by increasing rail shipments.
"I can say with absolute certainty: We will in any case be developing our relations with traditional partners, including the People's Republic of China. Whichever way (the pipeline runs), we will be stepping up crude oil exports to the PRC," Putin told Thailand's Star TV ahead of his meeting with Koizumi.