Nikolai Tokarev, the Transneft president, said the East Siberia-Pacific Ocean (ESPO) pipeline project, slated to pump up to 1.6 million barrels of crude per day from Siberia to Russia's Far East and then on to China and the Asia-Pacific region, could not be sped up as this measure would push up the company's costs considerably. He blamed Transneft's previous management for delays, Vedomosti said.
"The project has been accelerated to a maximum. It could be expedited further, if new credit facilities were raised. But this measure would push up the company's costs considerably compared with the planned $12 billion figure," Vedomosti quoted Tokarev as saying.
The project's first leg, estimated at $11 billion, was expected to be commissioned in December 2008. However, the Transneft head said on February 7 that the commissioning of the project would be delayed from late 2008 to late 2009.
Tokarev also blamed subcontractors for delays in the project's implementation.
"All the problems with the ESPO project have emerged due to a simple reason: the interests of those who undertook to do the work and the interests of the project radically diverted. Those who undertook to build the pipeline wanted to earn money at any cost, while the project's interests required a different approach and different arrangements," Vedomosti quoted Tokarev as saying.
According to Tokarev, the company's previous subcontractors had little construction experience and enlisted small firms with under-qualified personnel for the project. Transneft has only recently switched to signing direct contracts with subcontracts and has made offers to companies that have the skills and ability to effectively construct the pipeline, Vedomosti said.
The ESPO first stage envisages the construction of a 2,757-kilometer (1,713-mile) section with a capacity of 30 million tons (220.5 million bbl) of oil per year. The project's first leg will link Taishet, in East Siberia's Irkutsk Region, to Skovorodino, in the Amur Region, in Russia's Far East.
The second leg will stretch for 2,100 kilometers (1,304 miles) from Skovorodino to the Pacific. It will pump 367.5 million barrels of oil annually. The second stage also envisages an increase in the Taishet-Skovorodino pipeline's capacity to 588 million barrels.