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Russia's economics ministry opts for pipeline bypassing Belarus

MOSCOW, April 17 (RIA Novosti) - The Russian Industry and Energy Ministry has called a project to build an oil pipeline bypassing Belarus as a priority, the deputy minister told a pipeline conference Tuesday.

The industry ministry has already submitted a draft proposal to build the second leg of the Baltic Pipeline System to the government and is currently conducting active operations with pipeline monopoly Transneft [RTS: TRNF] on the project.

"The second leg of the Baltic Pipeline System is our priority now, and the Kharyaga-Indiga [pipeline] comes next," Andrei Dementyev said at the Pipeline Transport 2007 conference underway in Moscow.

Earlier reports said the industry ministry planned to assess whether it would be viable to build the Kharyaga-Indiga oil pipeline, which was originally seen as part of a larger pipeline to link oil-rich parts of West Siberia to Murmansk, a permanently ice-free port on the Barents Sea, for trans-shipment to Europe and the United States, before late this year.

Asked whether the new pipeline, which is due to carry 80 million metric tons (588 million bbl) of oil annually from Unecha in the Bryansk Region on the border with Belarus to Primorsk in the Leningrad Region, would reduce oil transit through the Druzhba pipeline, Transneft CEO Semyon Vainshtok said the aim was to diversify oil export routes, also by increasing Baltic sea shipments on larger tankers.

However, Vainshtok refused to disclose project costs and timelines for a feasibility study.

"I don't know how much it will cost," the businessman said, referring to the East Siberia-Pacific Ocean oil pipeline, whose cost had increased 40% in 4.5 months.

Vainshtok also said that the project feasibility study would be prepared as soon as the government had issued instructions on launching the second leg of the Baltic pipeline.

The Druzhba (Friendship) pipeline extends for almost 2,000 kilometers (1,300 miles) across Belarusian territory and pumps on average up to 80 million tons of Russian oil per year to Germany, Poland and Ukraine.

On January 1 Belarus introduced transit duties on Russian oil at $45 per metric ton, which suspended Russian oil transit to Europe through the Druzhba pipeline.

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