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Russian Prime Minister Putin Launches the ESPO Pipeline

Russian Prime Minister Vladimir Putin formally launched the Phase 1 Eastern Siberia-Pacific Ocean (ESPO) oil pipeline, and started the loading of the first tanker with ESPO oil. The first phase of the pipeline—the longest oil pipeline in the world—cost 360 billion rubles ($12.16 billion, or €8.46 billion), with another 60 billion rubles spent to build a port in Kozmino.

Map showing the Phase 1 and Phase 2 ESPO pipelines. Source: US EIA. Click to enlarge.

The commissioning ceremony took place at the harbor; the first batch of oil is being shipped to Hong Kong.

ESPO, which was initiated in 2004 and is being built by Transneft, Russia’s state-owned oil pipeline company, is intended to open the Asia-Pacific markets for Russian oil—notably both China and Japan. Currently, most Russian oil is produced in western Siberia and transported through pipelines to Western Europe. However, the eventual 4,188-kilometer (2,602-mile) pipeline will transport oil from western and central Siberian oilfields to the Sea of Japan, creating a significant shift in the direction of oil exports.

The first stage of the 600,000 bbl/d-pipeline will flow from Taishet to Skovorodino along with the port facility at Kozmino Bay. Oil is shipped via rail to the Pacific coast until the second stage of the pipeline is constructed. China has agreed to finance a 43-mile, 300,000-bbl/d spur from Skovorodino to the Chinese border. The second stage of the pipeline will run from Skovorodino to the Pacific Coast, with planned designed capacity of 1.6 million bbl/d.

The routing of the pipeline was subject to controversy, as environmental organizations pushed—successfully—to have it routed away from Lake Baikal.

The route of the 2,694 km (1,674 miles) first stage of the ESPO route passes Taishet (Irkutsk region) - Ust-Kut (Irkutsk region) - Lensky (Yakutia) - Aldan (Yakutia) - Skovorodino (Amur region). From Skovorodino oil trains weighing from 4.5 to 4.8 thousand tons will be sent to the Pacific Ocean. Total deliveries will reach 15 million tons per year. Another 15 million tons will be delivered to China by a branch of ESPO pipeline being built in the area Skovorodino. Within the ESPO-1, there will be seven oil pumping stations (NPS).



Ultimately I think this is an awesome idea...and improves America's energy security & market stability.


ejj: Yes, a more diversified market will benefit users and could stabilize the oil market.

There are possibilities that a similar pipeline may be built from Alberta, accross the Rockies, to a new BC port to export large quantities of oil from tar sands to Japan, China, India +++

This could also have a stabilizing effect on supply and demand.

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