Russian ministry says East Siberian oil pipeline violates law

Moscow (Platts)--29Sep2005

Russia's Natural Resources Ministry Thursday said a feasibility study of
the planned East Siberian oil pipeline did not conform with Russian law. 
     The feasibility study, which Transneft sent to the government earlier
this week, suggests a route that goes just within a 800-meter proximity to
Lake Baikal, which contradicts an earlier environmental approval of the
project, the ministry said. 
     The state environmental approval envisaged the route going further away
from the lake, which mainly influenced the government's decision to give its
go-ahead to the project on Dec 31, 2004, the ministry said. Should amendments
to the pipeline's project be made now, the environmental approval will lose
its force, and the amended documents will require a new approval, according to
the law.
     "Accidents with oil spills along any route that runs within the drainage
basin of Baikal...threaten to destroy the lake's delicate ecosystem. The
closer to the shoreline the route goes, the higher environemtal risks," the
ministry cited in a letter sent by Deputy Minister Valentin Stepankov to the
technical supervising agency Rostekhnadzor. The agency has also received a
copy of Transneft's feasibility study.
     Among other drawbacks of the study, the ministry noted ambiguity
regarding the location of the oil terminal for the pipeline project. The
ministry demanded that the documents identifying the terminal's location be
presented for the governement's consideration.
     Transneft rejected the ministry's accusations. "We have done everything
in accordance with the legislation," Transneft Vice President Sergei Grigoriev
told Platts.
     He noted that Baikal's water-conservation zone was 300- to 350 meters,
and that Transneft did not infringe the regulations. "Yes, we are going [to
build the pipeline] within the drainage area but we are going to use advanced
technology. We spend hundreds of millions of dollars for the route to avoid
damage to nature," Grigoriev said. 
     He noted that the project per se ruled out any accidents at all, only
allowing for emergencies not relating to the pipeline. "The railroad that is
running along the shore is more dangerous than the pipeline would be," he
said. 
     Grigoriev also rejected the ministry's conclusions about the terminal.
"We have made it clear in the feasibility study that the terminal's site is to
be Perevoznaya Bay," he said. Environmental groups have widely criticized the
choice, as two national parks are located in the area. 
     Transneft will revise the feasibility study only if it receives the
government's conclusion with clear objections, Grigoriev said. 
     The feasibility study is to be considered by several ministries before it
completes state environmental approval. 
     The first stage of the pipeline project envisages construction a pipeline
from Taishet in East Siberia to Skovorodino in the Amur region in Russia's Far
East with the capacity of 30-mil mt/year (600,000b/d), and a terminal on the
Pacific. Both the pipeline and the terminal are scheduled to be commissioned
in the second half of 2008.
     At a second stage, a 50-mil mt/year pipeline from Skovorodino to the
Pacific is to be built, but that plan will depend on how swiftly East Siberian
reserves are developed, according to the Russian government.
--Anna Shiryaevskaya, anna_shiryaevskaya@platts.com

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