LOS ANGELES, Oct. 26 -- China and Russia are beginning a feasibility study on construction of the proposed oil pipeline spur from Skovorodino to the Chinese border. The spur would be part of the planned Eastern Siberia-Pacific Ocean (ESPO) pipeline connecting eastern Siberian oil deposits with an export terminal on Russia's Pacific coast.
Russia's ambassador to China Sergel Razov said participating Russian companies have finalized draft letters of intent and submitted them to their Chinese counterparts. In addition to the feasibility study, Razov said, a subcommittee recommended that the relevant companies continue cooperation on the pipeline.
Russia's Industry and Energy Ministry announced in 2005 it would construct the first stage of the ESPO line from Tayshet in central Siberia to Skovorodino in the Amur region, about 70 km from the Chinese border (OGJ Online, Apr. 27, 2005).
Russia's state-owned pipeline company Transneft signed an agreement with China National Petroleum Corp. in March on construction of the Skovorodino branch line.
Meanwhile, Russian authorities said ESPO design work is proceeding on schedule, even though the duration of a related environmental study was extended earlier this year (OGJ Online, Feb. 24, 2006).
However, to bypass freshwater Lake Baikal, the extended environmental study recommended a change in the pipeline route that will increase construction costs by $1 billion, according to Russian President Vladimir Putin.
"As far as the pipeline system linking East Siberia and the Pacific Ocean (coast) is concerned, it is not an easy task, either from a technical or technological standpoint. It is not low-cost, either. It will cost us an additional $1 billion," Putin told national television on Oct. 25.
"But, since the pipeline will be built closer to the deposits, which will allow oil companies to save on auxiliary routes, the costs will not be that large in general. We will safeguard Lake Baikal. It is our national treasure," Putin said.
Contact Eric Watkins at [email protected].