Russia, Japan to Build Oil Pipeline

Russia and Japan agreed to construct the East Siberia-Pacific Ocean oil pipeline, the Japanese Prime Minister Junichiro Koizumi said at a final press-conference at the end of G8 summit in St. Petersburg.

The pipeline is slated to pump up to 80 million metric tons of crude a year (1.6 million barrels per day) from Siberia to Russia?s Far East. The oil will then be exported to the Asia-Pacific region with a branch going to energy-hungry China.

The first stage of the project will connect Taishet in the Irkutsk Region to Skovorodino in the Amur Region in the Far East. The cost of the first stage was initially estimated at $6.5 billion.

Japanese Prime Minister?s words were supported by the Russian Industry and Energy Minister Viktor Khristenko who said Japan has offered to invest in oil production in Siberia in exchange for the speeding up of the construction of the Siberia-Pacific pipeline. ?The decision has been taken to build the first part of the pipeline and the terminal,? Khristenko said, quoted by AFX. The Russian minister added, however, that the decision on the second part of the pipeline will be taken ?when we have more information on the (oil) resources available in East Siberia?.