Japan to get oil via Siberian pipeline in 2012

May 03, 2005 02:00 AM

In a breakthrough, Russia has for the first time clarified when Japan could expect to start receiving oil via a planned Siberian pipeline, sources said.
Russian Industry and Energy Minister Viktor Khristenko, speaking during a bilateral ministerial meeting in April, said the pipeline would not be up and running until 2012, as it would take seven years for the project to move from research to production. His remarks came during a meeting with Economy, Trade and Industry Minister Shoichi Nakagawa on April 21, at which Khristenko explained the pipeline plan "depends on the pace of oil exploration in eastern Siberia."

For the government, which is considering whether to help pay for the construction of the eastern Siberian pipeline, uncertainty remains over future developments in Russia that could affect how much oil Japan will be able to secure.
The Russian side's remarks also indicated that financial cooperation from Japan will be necessary, partly because demand for crude oil in Japan is unlikely to grow significantly. Russia aims to draw up more detailed plans for the proposed pipeline soon, the sources said.

Khristenko said it would take "at least seven years" to begin production at undeveloped oil wells, output from which will be supplied to Japan.
Nakagawa expressed grave concern about Japan's cooperation in the pipeline project, saying, "The market for the oil when the pipeline is completed will likely be Japan, South Korea, Shanghai and Guangdong Province in China. Are there enough reserves?"
"If reserves are insufficient, it'll be difficult to offer cooperation," he told Khristenko.

In addition to uncertainty about the size of the oil reserves, growth in demand for crude oil in Japan is predicted to slow due to a decreasing population and progress in energy-efficiency. If the Russian pipeline proves expensive to construct, it will be difficult for Japan to make a profit, oil experts say.
Two routes for the pipeline are being considered, one into China and another to the Pacific Ocean, which runs along the Trans-Siberian Railway.

The Pacific route will be about 4,200 km long, connecting Taishet in eastern Siberia and Perevoznaya near Nakhodka.
If the pipeline reaches the Sea of Japan coast, sales routes can be expanded to include the United States and South Korea, an option favoured by both countries.

Source: The Yomiuri Shimbun
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