China and Japan Vie for Russian Oil

Ross Rogers, Jr- forwards this article from the People's Daily of Beijing:The Russian government will make a decision on the feasibility of the oil pipeline from Angarsk in Siberia to Nakhodka facing Japan by the end of the year, Russian Deputy Prime Minister Alexander Zhukov said. "By the end of the year a decision will be reached on the route of the pipeline and on the preparation of a feasibility study for this project," Zhukov said after meeting with Japanese Economics, Trade and Industry Minister Shoichi Nakagawa, Interfax news agency reported. Zhukov said during discussion about the pipeline that the Japanese side expressed its interest in the project, which will require major investment and ecological studies.

Ecological issues of the project are currently being carefully examined, said the deputy premier, stressing that the payback issue of the 4,000-kilometer pipeline should be carefully calculated. China and Russia have signed a framework agreement to build a pipeline linking Russia's Angarsk to China's Daqing. However, the Kremlin became ambiguous over the project after Japan offered a rival pipeline that would bypass China and stretch to Russia's Far East port of Nakhodka. The third possible route that will also transport crude from Russia's vast Siberian reserves to the Asia- Pacific region is a pipeline to Nakhodka with a branch line to China. In March, Russia's state-owned oil transporting company Transneft proposed a new route from Taishet, some 500 kilometers northwest of Angarsk, to Nakhodka with a branch line to China. However, none of these pipeline options have been decided yet, prompting China and Japan to vie for access to Russia's abundant oil resources.

Ronald Hilton -