First-phase ESPO oil line capacity revealed

The first stage of Russia's East Siberia-Pacific Ocean oil pipeline from Taishet to Skovorodino will be filled at the rated capacity of 30 million tpy once completed, according to senior Russian officials.

Eric Watkins
Senior Correspondent

LOS ANGELES, July 25 -- The first stage of Russia's East Siberia-Pacific Ocean (ESPO) oil pipeline from Taishet to Skovorodino will be filled at the rated capacity of 30 million tonnes/year once completed, according to senior Russian officials.

Deputy Prime Minister Sergei Naryshkin said, "Exploration and development work at the fields [is] on schedule, and we are certain that the pipeline will be used at its rated capacity upon completion of the first stage of the project."

He said the government had "decided to support oil production in Eastern Siberia" and that production in the region will develop at a rapid pace.

Meanwhile, after examining construction of the first stage of the pipeline, Russia directed government departments involved with the ESPO to submit price estimates for the cost of transporting oil through the line.

Russian Prime Minister Mikhail Fradkov said estimates of freight flows and tariff policy for the line should be completed in the third quarter so that decisions could be made by mid-December regarding the basis for transportation tariffs and assessing the tariffs to transport oil through the pipeline from the terminal in Kozmino Bay.

Oil shipment prices initially were estimated at $38.8/tonne, based on an overall ESPO project cost of $6.65 billion in 2004. But cost estimates for the project were revised upward to $11.3 billion in 2006, and officials now are considering a parallel upward revision in the transport price to as much as $50/tonne.

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