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Saturday, December 16, 2017

Oil pipelines to China and other Asian markets will take market share from tankers

According to the Energy Intelligence Group, Russia has started construction of the USD 7.2 billion East Siberian oil pipeline to China and other Asian markets. The final route may be diverted away from LakeBaikal, which could add another billion dollars to the cost. The first pipe-joint was welded at the end of April near Taishet, the starting point of the 2,284 km line.  

On completion in 2008, the line will pump 0.6 million barrels per day to China. A later phase will extend it to a terminal on Russia's Pacific coast to serve Japan and other Asian markets, and potentially the U.S. West Coast.  

Just two days before work began, President Vladimir Putin bowed to environmentalist pressure and ordered Russian pipeline operator Transneft to study re-routing the pipeline 40 km north of LakeBaikal. It was originally planned to run just 800 metres from Baikal, the world's largest freshwater lake. In the meantime, work will also start on laying the pipeline from the eastern end, at Skovorodino, 70 km from the Chinese border. 

A new pipeline from Kazakhstan to China, due to come on stream in mid-2006, will add an additional 0.2 mbd of capacity, which can be doubled later on. The potential throughput of the Caspian terminal of Aktau has been expanded to more than 0.2 mbd. 

Contact: Erik Ranheim