the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
transporting oil to Asia. The pipeline has experienced serious delays due to construction difficulties,
environmental concerns and price disputes, but received a much-needed boost from a US$10bn Chinese
loan in February 2009.
ESPO is being built in two stages. The first 2,757km stage will link Taishet in the Irkutsk region to
Skovorodino in the Amur region and has capacity of 600,000b/d. From Skovorodino, ESPO will branch
out to China, via a 70km connector, which will supply northern China with 300,000b/d from 2011. The
first section of the pipeline had to be moved to 400km away from the ecologically sensitive Lake Baikal,
missing the end-2008 deadline by a year and coming online in late-2009.
The second leg of ESPO will cover 2,100km from Skovorodino to Kozmino on the Pacific and will
increase the capacity of the entire pipeline to 1.6mn b/d. The second phase is not expected to be
completed until 2014/2015. ESPO will be supplied primarily by Russian oil companies Rosneft, TNK-
BP and Surgutneftegaz from untapped fields in East Siberia. It is hoped that this will allow Russia to
replace dwindling output from West Siberia. Until ESPO Phase 2 comes online, oil from Skovorodino is
transported by rail to the Pacific port of Kozmino for export.
On August 29 2010, Vladimir Putin officially inaugurated the Russian section of the ESPO pipeline spur
from Skovorodino to the Chinese city of Daqing. The 70km pipeline will run to the Chinese border,
where it will connect with the 927km Chinese section of the spur, whose construction was completed in
June 2010. The pipeline is expected onstream by October 31 2010, and will supply CNPC with
300,000b/d in 2011-2030.
Purpe-Samotlor
Transneft began constructing a new major link from the Yamal Autonomous District in March 2009. The
430km Purpe-Samotlor pipeline will provide a better export route from crude volumes from the giant
Vankor oil field and will speed up the development of other deposits in the Yamal and north-western
Krasnoyarsk regions. The pipeline will run from the village of Purpe to the Samotlor oil field in the
Khanty-Mansiysk region further south. The link will cost US$1.34bn and is due to be commissioned in
2012. Initial capacity will be 500,000b/d, which could be expanded at a later date.
The Purpe-Samotlor pipeline will replace the longer and smaller-diameter lines for transporting Vankor
crude. The new link will cut about 100km from Vankor's route to ESPO trunkline. As well as providing
transit capacity for further expansion at Vankor, it will benefit TNK-BP's Suzun, Tagul and Russkoe field
developments on the Yamal peninsula.
Baltic Pipeline System
The Baltic Pipeline System (BPS) has two phases: BPS-1 and BPS-2. The pipelines transport oil from
West Siberia and the far north of the country to the Baltic Sea terminal of Primorsk. The pipeline system
began operations in 2001 and reached its full design capacity in 2006. Construction of a second phase of
the network, known as BPS-2, started in June 2009. The pipeline was designed to expand the existing
© Business Monitor International Ltd Page 71