Bloomberg News

Transneft Opens Siberian Oil Link as Russia Seeks Export to Asia

October 25, 2011

Oct. 25 (Bloomberg) -- OAO Transneft, Russia’s oil pipeline operator, began pumping crude oil through a $1.5 billion link today to boost flows from new Siberian developments to Asian markets.

The Samotlor-Purpe pipeline was opened about a year earlier than planned with capacity to carry 25 million metric tons a year (500,000 barrels a day), at a ceremony attended by Transneft President Nikolai Tokarev and Energy Minister Sergei Shmatko in Siberia. Transneft may double capacity.

The 430-kilometer (270-mile) link feeds into the East Siberian Pacific Ocean pipeline, which Transneft built to supply China and is extending to the coast as Russia seeks to diversify energy exports away from Europe.

“Asia is a priority for Russia,” Shmatko said. China surpassed Germany as Russia’s largest trade partner last year and turnover may exceed $70 billion this year, Prime Minister Vladimir Putin said during a visit to Beijing this month.

Transneft aims to build and open a 112 billion-ruble ($3.7 billion) link from Zapolyarye to Purpe by 2016, Shmatko said. “We may be able to celebrate its opening even earlier.”

Transneft, which is financing 30 percent of the cost from its own cash and using existing credit lines for the remainder, has no plans for new borrowing, Tokarev said. Samotlor-Purpe cost 45 billion rubles to build, 15 percent less than planned, he said.

OAO Rosneft, Russia’s largest oil producer, will increase supplies to the pipeline, as it raises output from 300,000 barrels a day to 500,000 barrels a day in 2013. TNK-BP, OAO Lukoil and OAO Gazprom Neft, three of the country’s five biggest oil producers, also have prospects in the region.

--Editors: Torrey Clark, Alex Devine

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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