Russian Supreme Court rejects appeal against Siberian oil line

Moscow (Platts)--10Mar2006

Russia's Supreme Court has rejected an appeal by ecological organizations
against a planned oil pipeline that would run close to Lake Baikal in East
Siberia, Russia's industry and energy ministry said Friday. 

     The ecological organizations in Russia's Far East filed a lawsuit with
the court insisting that the government had broken a law by endorsing
construction of the pipeline to be laid just 800 meters from Baikal prior to
the ecological approval of the project, and had demanded that the resolution
be annulled.

     But the Supreme Court ruled Thursday that the government's decision in
December to build a 4,000-km oil line across East Siberia to the Pacific coast
was legitimate, the ministry said. Ecologists in Russia's Far East said they
would appeal against the decision.

     Meanwhile, Greenpeace Russia is also preparing to file a lawsuit, this
time to annual a Monday approval of the project by Russia's federal
environmental watchdog. Greenpeace said the government had received the
approval after heavy state pressure on the watchdog's members to drop their
objections.

     Some members of the expert commission are also ready to file lawsuits or
be witnesses in the court against the approval, according to Gennady Chegasov,
who heads an expert working group with the environmental watchdog.

     Among major ecological concerns is the proximity of the planned pipeline
to Lake Baikal, located in an area prone to earthquakes. Ecologists argue
that there is no guarantee that the pipeline would resist a possible major
earthquake and oil would not spill into the world's largest freshwater
reserve.

      The national pipeline monopoly Transneft plans to announce tenders and
start construction of the line after it receives a final approval by the
expert bureau of Russia's federal construction service, Transneft's
vice-president Sergei Grigoryev said. The approval is expected "as soon as
this month," he added.

     Grigoryev also said the company was continuing looking for a site for a
Pacific coast terminal to be built in addition to the pipeline, and is
considering ten possible locations near the port of Nakhodka. In November, the
ecological watchdog rejected a site at Perevoznaya Bay previously proposed by
Transneft. Grigoryev did not say when the company planned to make a decision.
He said construction of the terminal might start a year after the work on the
pipeline had started.

     The first stage of the project envisages building a 30 million mt/year
(600,000 b/d) pipeline from Taishet in East Siberia to Skovorodino in the Amur
region in Russia's Far East and a terminal on the Pacific. Both expected to be
commissioned in late 2008. 

     At a second stage, a 50 million 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.

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