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Transneft to develop existing oil terminal bypassing Belarus

MOSCOW, June 18 (RIA Novosti) - The head of Russia's Transneft said Monday the pipeline monopoly would develop the existing terminal of an oil pipeline that helps Russian crude reach world markets without passing through transit countries.

"The port of Primorsk has a lot of space capacity, while [a new oil terminal at] Ust-Luga would have to be started from scratch," Semyon Vainshtok, the chief executive of Transneft, said in response to earlier proposals to build a second terminal for the Baltic Pipeline System 2.

The terminal's annual capacity can be increased by 50 million metric tons from next year without additional construction, he said.

This statement comes days after Valery Serdyukov, the governor of the Leningrad Region surrounding St. Petersburg where the current destination (Primorsk) and the prospective one (Ust-Luga) are based, asked President Vladimir Putin to consider whether the expanded BPS should use two terminals, citing environmental concerns.

The Transneft CEO said Primorsk not only has enough spare capacity to handle the additional oil without new construction, but also provides safe approach for tankers. Ust-Luga would require costly canal maintenance every year, Vainshtok said.

BPS transports Siberian crude oil to a Russian sea terminal with potentially global reach. Its extension BPS-2 is widely perceived as an alternative to the Druzhba ('Friendship') pipeline network which was built in Soviet times to pump Russian oil to Europe through Belarus and terminals in the Baltics.

Late last year, Russia briefly suspended oil transport via Belarus over a transit pricing dispute, and has ceased to supply crude via Druzhba to the Lithuanian Mazeikiu refinery, sold earlier to a Polish, rather than a Russian, company. Russia has cited the need for urgent repairs, while Lithuania says the decision is political.

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