Eastern Siberia – Pacific Ocean oil pipeline

Eastern Siberia – Pacific Ocean oil pipeline
Location
Country Russia
General direction west–east
From Taishet
Passes through Kazachinskoye, Skovorodino
To Kozmino, Daqing (China)
Runs alongside Yakutia–Khabarovsk–Vladivostok gas pipeline
General information
Type oil
Operator Transneft
Commissioned 2009 (2014)
Technical information
Length 4,857 km (3,018 mi)
Maximum discharge 1,600 thousand barrels per day (~8.0×10^7 t/a)

The Eastern Siberia–Pacific Ocean oil pipeline (ESPO pipeline, Russian: Нефтепровод "Восточная Сибирь - Тихий океан" (ВСТО)) is a pipeline system for exporting Russian crude oil to the Asia-Pacific markets (Japan, China and Korea). The pipeline is built and operated by Russian pipeline company Transneft.

Contents

History

The original project of this pipeline was proposed by the Russian oil company Yukos in 2001 as an independent oil pipeline. The project proposed to build a pipeline from Angarsk, where Yukos operated a refinery, to Daqing in northern China.[1] At the same time, Transneft proposed an alternative project to pipe oil from Taishet in Irkutsk Oblast to the Far East port of Nakhodka.[2] In May 2003, the Russian Government decided to combine these projects and that Transneft would be in charge of the pipeline, while Yukos would supply the oil.[3] On 29 May 2003, Russia and China signed an agreement on construction of the pipeline.[2] On 31 December 2004, the Russian government approved the construction of the pipeline from Taishet in East Siberia to Pervoznaya in the Pacific region.[4]

Construction of the pipeline started in April 2006.[5] On 4 October 2008, the section between Taishet and Talakan was launched in a reverse to pump oil from Surgutneftegas-owned Alinsky deposit.[6] The first stage of the pipeline was completely laid in May 2009 and the whole first stage was reversed in December 2009. The terminal at Kosmino was inaugurated by Russian prime minister Vladimir Putin on 28 December 2009.[7]

In February 2009, Russia and China signed a deal according to which the spur pipeline to China would be built and Russia would supply China with 15 million tonnes of oil (300,000 barrels per day) each year for 20 years in exchange for a loan worth US$25 billion to Russian companies Transneft and Rosneft for pipeline and oil fields development.[8] Construction of the spur to China started in the Russian territory on 27 April 2008 and in Chinese territory on 18 May 2009.[9][10]

On January 1, 2011, Russia said it had begun scheduled oil shipments to China, with the plan to increase the rate up to 300 thousand barrels per day (~1.5×10^7 t/a) in 2011.[7]

Route

The 4,857-kilometre (3,018 mi) pipeline is being laid by the route of Taishet-Kazachinskoye-Skovorodino-Kozmino.[11] Because of protests of environmental organizations, the initial pipeline route was moved 40 kilometres (25 mi) north of Lake Baikal. Instead of going through Buryatia, it was built through Sakha Republic.[12] The 2,757-kilometre (1,713 mi) long first stage runs from Taishet to Skovorodino and the 2,100-kilometre (1,300 mi) long second stage will run from Skovorodino to Kozmino.[11] From Skovorodino the branch pipeline would extend through Mohe to Daqing, China.[13]

There is a plan to lay a parallel Yakutia–Khabarovsk–Vladivostok gas pipeline alongside the oil pipeline.[14][15]

Technical features

The initial capacity of the 1,220-millimetre (48 in) pipeline is 600 thousand barrels per day (~3.0×10^7 t/a). By 2016 the capacity of the pipeline will be increased up to 1,000 thousand barrels per day (~5.0×10^7 t/a) and by 2025 up to 1,600 thousand barrels per day (~8.0×10^7 t/a). The capacity of the link to China would be 600 thousand barrels per day (~3.0×10^7 t/a) and its section in the Russian territory would cost US$600 million.[16][17][18]

The pipeline would consist of 32 pumping stations, including 13 with tank farms with a total capacity of 2.67 million cubic meter. For feeding pumping stations with electricity, a 35 MW power station will be built near the town of Olyokminsk in the Sakha Republic. It will be fired by the crude oil from the ESPO pipeline. The power station will be designed for independent operation in demanding arctic temperature conditions.[19] The terminal at Kozmino has a tank farm with a capacity of 350,000 cubic meters. The loading capacity of the terminal is 300 thousand barrels per day (~1.5×10^7 t/a).[18][20]

The first stage of the pipeline costs US$12.27 billion and the export terminal costs $1.74 billion.[21]

Construction

First stage

The 2,757 kilometres (1,713 mi) long first stage of the pipeline, running from Taishet in Irkutsk Oblast to Skovorodino in Amur Oblast, was built by Systema SpecStroy, Krasnodarstroytransgaz, Vostok Stroy, Promstroy, Amerco Int. and IP Set Spb.[21][22] Five 16V32 crude oil-fired engines for the pipeline-related power station were delivered in summer 2008 by Wärtsilä.[19] The first stage of the pipeline with the total cost of US$12.27 billion and the export terminal with cost of US$1.74 billion are planned to be completed in the third quarter of 2009.[21]

Second stage

Construction of the 2,100 km (1,300 mi) long second stage from Skovorodino to the Pacific Ocean would start after launch of the first stage. It would be commissioned by 2014.[10] In meantime, oil will be transported from Skovorodino to Kozmino by railway.[23]

Spur to China

The 64 kilometres (40 mi) long section from Skovorodino to the Amur River on Russia-China border is built by Transneft and the 992 kilometres (616 mi) long section from Russia-China border to Daqing is built by the China National Petroleum Corporation.[10] It was completed in September 2010.[24]

Resource base

The pipeline will be supplied from the oil fields of Tomsk Oblast and the Khanty-Mansi Autonomous Okrug in Western Siberia along the existing Omsk–Irkutsk pipeline that will join the new project in Taishet, as well as oil provinces of Eastern Siberia. At the initial stage 22 million tons of oil will be supplied by Rosneft and 8 million tons by Surgutneftegas.

Controversies

Embezzlement allegations

In November 2010, one of the minor shareholders of Transneft, Alexey Navalny, accused the company for US$4 billion embezzlement during the construction of the pipeline.[25][25] These accusations were denied by Nikolay Tokarev, head of Transneft.[25]

Dispute with CNPC

In 2011, a dispute rose over payments for oil delivery through the pipeline. While Transneft has charged CNPC with violating their supply contract, CNPC is not acknowledging these claims. The contract stipulate the monthly volumes of oil according to the agreed price formula, which is less than the spot price of oil.[26][27]

See also

References

  1. ^ Helmer, John (2005-04-29). "China beats Japan in Russian pipeline race". Asia Times. http://www.atimes.com/atimes/Central_Asia/GD29Ag01.html. Retrieved 2008-11-29. 
  2. ^ a b "China, Russia sign oil pipeline agreement". China Daily. 2003-05-29. http://www.chinadaily.com.cn/en/doc/2003-05/29/content_166888.htm. Retrieved 2008-11-29. 
  3. ^ Helmer, John (2008-11-01). "China ties up Russia's crude - again". Asia Times. http://www.atimes.com/atimes/China_Business/JK01Cb01.html. Retrieved 2008-11-29. 
  4. ^ "Russia approves Pacific pipeline". BBC News. 2004-12-31. http://news.bbc.co.uk/2/hi/business/4138157.stm. Retrieved 2011-07-06. 
  5. ^ "Transneft Sets to Eastern Siberia-Pacific Ocean Oil Pipeline". Kommersant. 2006-04-18. http://www.kommersant.com/p667408/r_500/Transneft_Sets_to_Eastern_Siberia-Pacific_Ocean_Oil_Pipeline/. Retrieved 2008-11-29. 
  6. ^ Blagov, Sergei (2008-10-22). "Russia sees eastern pipeline as a "major victory"". Eurasia Daily Monitor (Heritage Foundation). http://georgiandaily.com/index.php?option=com_content&task=view&id=7825&Itemid=132. Retrieved 2008-11-29. 
  7. ^ a b Bryanski, Gleb (2009-12-28). "Russia's Putin launches new Pacific oil terminal". Reuters. http://uk.reuters.com/article/idUKLDE5BR00F20091228?sp=true. Retrieved 2009-12-28. 
  8. ^ Kim, Lucian (2009-02-17). "Russia Agrees to $25 Billion Oil-for-Loans Deal With China". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601087&sid=aq_6uYgEtOmY&refer=home. Retrieved 2009-02-17. 
  9. ^ "Chinese Envoy to Russia: Oil Pipeline Serves Strategic Goals of Both Sides". BBC Monitoring (Downstream Today). 2009-05-11. http://downstreamtoday.com/news/article.aspx?a_id=16321. Retrieved 2009-05-16. 
  10. ^ a b c Watkins, Eric (2009-05-05). "China to begin construction of 992-km ESPO 'extension'". Oil & Gas Journal (PennWell Corporation) 107. http://www.ogj.com/index/article-display/361235/articles/oil-gas-journal/transportation/china-to-begin-construction-of-992-km-espo-extension.html. Retrieved 2009-05-16. 
  11. ^ a b "Transneft ready to bring ESPO Pipeline section online". Pipelines International (Scientific Surveys, Great Southern Press). 2009-12-22. http://pipelinesinternational.com/news/transneft_ready_to_bring_espo_pipeline_section_online/009291/. Retrieved 2009-12-28. 
  12. ^ "Russia approves new ESPO pipeline route". RIA Novosti. 2008-03-03. http://en.rian.ru/russia/20080303/100502195.html. Retrieved 2008-11-29. 
  13. ^ "Russia-China pipeline progressing". Upstream Online (NHST Media Group). 2007-06-15. (subscription required). http://www.upstreamonline.com/incoming/article135430.ece. Retrieved 2007-12-08. 
  14. ^ Watkins, Eric (2009-01-29). "Putin says ESPO may have parallel gas line". Oil & Gas Journal (PennWell Corporation) 107 (6). http://www.ogj.com/index/article-display/351882/s-articles/s-oil-gas-journal/s-transportation/s-putin-says-espo-may-have-parallel-gas-line.html. Retrieved 2009-05-16. 
  15. ^ "Russia's Gazprom mulls new liquefaction plant in country's Far East". Platts. 2008-06-24. (subscription required). https://online.platts.com/PPS/P=m&e=1214432995732.3805867267113022414/LNG_20080624.xml?artnum=200c80Ve6z2MT41852J2M1_1. Retrieved 2008-08-02. 
  16. ^ "Work on second leg of East-Siberian pipeline could start 2015". RIA Novosti. 2007-07-19. http://en.rian.ru/russia/20070719/69246823.html. Retrieved 2008-04-05. 
  17. ^ "China leg of Siberia oil pipeline to cost $600 mln - Transneft". RIA Novosti. 2008-10-30. http://en.rian.ru/business/20081030/118045392.html. Retrieved 2008-11-29. 
  18. ^ a b Trevethan, Catherine. "Eastern Siberia – Pacific Ocean (ESPO) Pipeline" (GIF). Reuters. http://graphics.thomsonreuters.com/129/RS_OILKZ1209.gif. Retrieved 2009-12-28. 
  19. ^ a b "Wartsila Announces Major Contracts for 2007". Wärtsilä (Downstream Today). 2007-11-14. http://www.downstreamtoday.com/news/article.aspx?a_id=7107. Retrieved 2008-04-05. 
  20. ^ "Transneft to start oil terminal construction in Kozmino". Vladivostok News. 2008-02-28. http://vn.vladnews.ru/issue608/Special_reports/Transneft_to_start_oil_terminal_construction_in_Kozmino. Retrieved 2008-06-08. 
  21. ^ a b c Mosolova, Tanya (2007-12-27). "Russia delays Asian oil pipeline to Q3 2009". Reuters. http://uk.reuters.com/article/2007/12/27/transneft-pipeline-idUKL2759710220071227. Retrieved 2008-03-15. 
  22. ^ "Transneft cites Siberian-Pacific slow-down". Scandinavian Oil-Gas Magazine. 2007-11-22. http://www.scandoil.com/moxie-bm2/news/pipeline/transneft-cites-siberian-pacific-slow-down.shtml. Retrieved 2007-11-25. 
  23. ^ Watkins, Eric (2009-02-17). "China, Russia agree on loans for ESPO pipeline spur". Oil & Gas Journal (PennWell Corporation) 107 (41). http://www.ogj.com/index/article-display/353685/s-articles/s-oil-gas-journal/s-transportation/s-china-russia-agree-on-loans-for-espo-pipeline-spur.html. Retrieved 2009-05-16. 
  24. ^ Page, Jeremy (2010-09-26). "Russian Oil Route Will Open to China". The Wall Street Journal. (subscription required). http://online.wsj.com/article/SB10001424052748704082104575515543164948682.html. Retrieved 2010-09-28. 
  25. ^ a b c Soldatkin, Vladimir (2011-01-14). "Russia's Transneft denies $4 bln theft". Reuters. http://uk.reuters.com/article/2011/01/14/transneft-shareholder-idUKLDE70C1PF20110114. Retrieved 2011-07-06. 
  26. ^ Helmer, John (2011-05-05). "Russia, China clash over oil price, supply". Asia Times. http://www.atimes.com/atimes/Central_Asia/ME05Ag01.html. Retrieved 2011-07-06. 
  27. ^ O'Cinneide, Eoin (2011-07-01). "Transneft: 'CNPC rift ongoing'". Upstream Online (NHST Media Group). (subscription required). http://www.upstreamonline.com/live/article265038.ece. Retrieved 2011-07-06. 

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