Putin Hails ESPO Pipeline and Kuztsovsky Tunnel in Far Eastern Infrastructure and Energy Export Strategy

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Russian President Vladimir Putin's "tilt to the East" in energy exports in the face of changing global gas and oil imperatives, as well as the growing independence of Russia's Western clients, took a step forward when Phase II of the East Siberia-Pacific Ocean (ESPO) oil pipeline was commissioned last week.

In 2009, ESPO-1 was commissioned with a length of 2,694 kilometers to pump oil from Taishet in the Irkutsk region to Skovorodino in the Amur region. At the same time, an oil terminal was launched at Kozmino on Russia's Pacific coast, with oil feed delivered by rail.

With the launch of the second phase, with a length of more than 2,000 kilometers, the ESPO pipeline now has a length of 4,739 kilometers, and there is the prospect of increasing the its capacity from 30 million tons to 45 million tons annually.

At the launch of Phase II, Putin said: "Our products have been in demand among partners from such counties as Japan, China, the United States, the Philippines, South Korea, Indonesia, Singapore, Taiwan and Malaysia. A new mixture bearing the same name--East Siberia-Pacific Ocean--has been introduced on the international market."

Putin said that two projects, the ESPO pipeline's second phase and the opening of the Kuztsovsky tunnel, had expanded the infrastructure capacity of Russia's eastern regions considerably. The tunnel was another major step toward strengthening the transport infrastructure in Russia's Far East, he said.

The tunnel removed a bottleneck that had hampered further development of freight transportation via the Baikal-Amur railway to the sea ports of Vanino and Sovetskaya Gavan, and the expansion exports and the modernization of the industrial base.

Russia's Minister of Energy, Alexander Novak, said that, according to preliminary estimates, the oil feed resource base of ESPO-2 will be increased from 6 million tons from 2014 to 35.5 million tons in 2015, and a major volume of that oil will come from fields that are planned for development in East Siberia.

Branch pipelines also are planned to feed domestic refineries, with up to 7.5 million tons earmarked for this purpose by 2016.

Industry sources say that a challenge to the overall eastern oil strategy is the ability of the eastern oilfields to supply the volume of oil to justify the massive infrastructure and export hopes.

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