Putin says ESPO may have parallel gas line

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 29 -- Russian Prime Minister Vladimir Putin said a natural gas pipeline might be laid alongside the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline and would carry gas toward China and the Pacific Ocean.

"The project for the first section of the ESPO [oil] pipeline system is in its final phase," Putin said, adding: "In the long term, a gas pipe may be laid in the direction of the Pacific Ocean and China parallel to the oil pipeline."

Russia's state-owned pipeline monopoly OAO Transeft plans to commission the first section of the ESPO crude oil pipeline in December. The section, with a throughput capacity of 30 million tonnes/year, will extend from Taishet in East Siberia to Skovorodino near the border with China.

The second section of the ESPO, which is scheduled to be completed by yearend 2013 or the beginning of 2014, will extend from Skovorodino to the port of Kozmino on Russia's Pacific coast.

Earlier this month, Russia's transport Minister Igor Levitin said construction of the export terminal in Kozmino, as well as the port's approach railways, will be completed in 2010.

On completion of the ESPO's first section, up to 15 million tonnes of oil will be delivered by railway to the port of Kozmino for further shipment to Asia Pacific states, including Japan. An additional 50 million tonnes of crude will reach the port of Kozmino on completion of the ESPO's second section.

Meanwhile, Russia's subsoil use agency Rosnedra has set a starting bid price of 1.66 billion rubles ($50.3 million) at an auction for the rights to the East Talakan field in Eastern Siberia.

Russia's Vedomosti business daily reported that Surgutneftegaz, which is developing the adjacent Talakan field, is likely to get the rights to East Talakan, although Gazprom is also a leading candidate.

The paper reported that East Talakan field holds proved and probable reserves of 9.9 million bbl of oil, 22.9 billion cu m of gas, and 0.2 million tonnes of gas condensate.

According to analyst BMI, future development of oil from the East Talakan field "is likely to contribute to planned throughput for the ESPO line."

This year, BMI said, Surgutneftegaz is expecting to boost initial Talakan production to 40,000 b/d, with output expected to reach 120,000 b/d by 2015.

Contact Eric Watkins at [email protected].