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Russia's Putin Launches New Pacific Oil Terminal


Russian Prime Minister Vladimir Putin upon his arrival in Kozmino
(RFE/RL) -- With the click of a mouse today, Russian Prime Minister Vladimir Putin announced Russia's readiness to feed Asia's economic tigers.

Putin's action started loading oil onto a 100,000-ton tanker at the Far East port of Kozmino, launching a much-anticipated new export route to Hong Kong that will help satisfy Asia's growing need for energy.

The oil had already traveled far just to reach Kozmino, located near Russia's borders with China and North Korea.

Russia's new East Siberia-Pacific Ocean (ESPO) oil pipeline originates in Tayshet, to the northwest of Lake Baikal in Russia's Irkutsk Oblast. From there, it heads east for nearly 3,000 kilometers before reaching Skovorodino (Amur Oblast) where it was loaded onto a train for the 2,100-kilometer trip to Kozmino.

Russia's Transneft oil-transport company spent some $12 billion to build the new oil pipeline and will have to spend another $10 billion to complete the pipeline from Skovorodino to Kozmino. Transneft also spent some $2 billion building a new terminal at Kozmino.

Transneft President Nikolai Tokarev was in Vladivostok today and told reporters the significance of the new eastern route.

"The launch of the East Siberian-Pacific Ocean Pipeline, first of all, allows for intensive development of oil production in the region of East Siberia and Yakutia," Tokarev said. "It opens the way for the East Siberian oil to the perspective market of the Asia-Pacific region and to a great extent contributes to the strengthening of Russia's energy security."

The new pipeline, when it reaches full capacity, will allow Russia to export some 30 million tons of oil to China annually.

A 67-kilometer branch line running directly to China will be built next year in cooperation with the China National Petroleum Corporation and will carry an additional 15 million tons of oil when completed.

New Era Of Development

The ESPO pipeline is only the first stage of Russian plans to develop Siberian oil and gas fields and export to countries in Asia.

As Prime Minister Putin noted today, the start of the ESPO pipeline also heralds a new era of development in Russia's resource-rich but greatly underdeveloped regions in eastern Siberia and the Far East.

"This project makes it possible for us to reach out to completely new markets -- the growing and promising markets of Asia-Pacific region," Putin said.

"Russia is present here today, but not sufficiently. But the point is not that we are going to sell oil. The point is that this is a modern technology, an impetus to the development of the Far East and eastern Siberia."

Russia is developing several large gas and oil fields in the area east of the Ural Mountains to the Pacific Ocean.

There are already plans for more pipelines to China and development of port facilities along Russia's Pacific coast, including facilities for processing and shipping liquefied natural gas (LNG), which Russian officials have speculated could be exported to North America.

Additionally, there are plans to upgrade existing port facilities along Russia's Pacific coast and to build new tankers to ship oil and LNG.