10 January 2003 00:50
Japan and Russia set to back pipeline
Vladimir Putin, Russian president, and Junichiro Koizumi, Japanese prime
minister, are expected to announce in Moscow today an agreement to co-operate
on a 4,000km pipeline to export oil from Siberia to east Asia.
The Dollars 5bn venture would provide the first significant outlet for
Russian energy production to east Asia and eventually to the US west coast,
reducing these regions' reliance on Middle East producers.
A final decision will depend on calculations of the economic viability of the
project, which would run from Angarsk, west of Lake Baikal, via Khabarovsk to
Nakhodka on the Sea of Japan.
The Russian government must also decide between this project - planned by
Russian state-controlled group Transneft - and a scheme by Russian oil group
Yukos to supply eastern Siberian oil to China.
The Transneft scheme is believed to be preferred by Moscow. It is likely to
be favoured by the US as it will open Russian oil supplies to a wider market
than China.
"The Japanese government is very serious about realising this
project," Hirofumi Katase, director of petroleum and natural gas at
Japan's economy ministry, said in Moscow yesterday. "Japan would
also welcome US participation."
Ian Bremmer, president of the Eurasia group, a political risk consultant that
has been involved in liaising with Washington, said: "This would suit US
policy. The driving force behind the US-Russia partnership is the desire to
diversify supply of oil away from the Middle East."
The US has begun to purchase small quantities of Russian oil over recent
months.
Japanese officials said Japan would provide finance if the project were shown
to be economically viable.
But the rival plans will battle for Kremlin backing. "We are committed
to pursuing the China pipeline," said Yukos. "This changes nothing
in our plans. The project is on schedule."
The Yukos scheme is for a Dollars 1.8bn, 2,400km pipeline from eastern
Siberia to Daqing in Manchuria. The company has agreements for contracts to
supply 20m tonnes of oil a year to China by 2005 and 30m tonnes from 2010
until 2030. Oil fuels Japan's drive, Page 9 www.ft.com/asiapacific
[FTI [The Financial Times]] |
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