Moscow, Beijing agree on China spur construction

Moscow and Beijing have agreed in principle on construction of the pipeline spur to China from Russia's 4,200-km East Siberia-Pacific Ocean (ESPO) pipeline, now under construction from Taishet to Skovorodino.

Eric Watkins
Senior Correspondent

LOS ANGELES, May 23 -- Moscow and Beijing have agreed in principle on construction of the pipeline spur to China from Russia's 4,200-km East Siberia-Pacific Ocean (ESPO) pipeline, now under construction from Taishet to Skovorodino.

A final stage in the talks between Rosneft and China National Petroleum Corp. on this issue was held May 9, Russian President Dmitry Medvedev said ahead of a state visit to China earlier this month.

In April, Russia's former Deputy Industry and Energy Minister Andrei Dementyev said work on designing the spur was nearly complete, but construction would not begin until Russia's OAO Rosneft and CNPC agreed on the price of oil and size of shipments along the line.

Under Phase 1 of the ESPO project, oil is to be delivered by rail tankers from Skovorodino to an export terminal at Kozmino on Russia's Pacific Coast. But access rail to Skovorodino must first be modernized to ensure the onward transmission of oil to Kozmino.

Russian Prime Minister Vladimir Putin, saying the project was being held up by "procrastination," ordered Regional Development Minister Dmitry Kozak in early May to accelerate modernization of the railway infrastructure of the first phase of the ESPO pipeline.

The European Bank for Reconstruction and Development (EBRD) recently said it will lend money towards an oil exploration project that Russian firm Irkutsk Oil Co. plans to launch jointly with Japan.

EBRD's moves may facilitate the extension of the ESPO pipeline from Skovorodino to the Pacific Coast, as the extension depends upon Russia producing enough oil from the Siberian fields(OGJ, May 20, 2008).

Contact Eric Watkins at hippalus@yahoo.com.

More in New Plants