Japan continues push for Nakhodka pipeline, Russian oil
Oil and Gas Journal
 
By Eric Watkins 
Middle East Correspondent 
 
NICOSIA, Oct 15 -- Japan's Foreign Ministry has denied a Financial 
Times report published Tuesday that Tokyo offered to provide Russia 
with $7 billion to construct an oil pipeline from Angarsk in Siberia to 
Nakhodka on the Pacific Coast.

The report cited a Japanese energy official as saying Monday that Tokyo 
was proposing $5 billion to support construction of the 4,000 km oil 
pipeline to Nakhodka, and another $2 billion to develop Siberian oilfields 
to feed that million b/d line, with some support in the form of low-interest 
loans.

"We have not made any proposals with such specific figures," said a 
Japanese Foreign Ministry official, who did not deny, however, that other 
figures might be on the table. Earlier this year similar reports of a $7.5 
billion offer also had surfaced (OGJ Online, June 30, 2003).
The reports claim that Japan is offering the financial package as an 
inducement aimed at persuading Russia to build the Nakhodka line 
instead of a less-costly $2.5 billion rival-a 2,400 km route into Daqing in 
northeast China. The profitability of the Daqing route has been assured 
following the completion of a feasibility study, while that of a Nakhodka 
line remains uncertain.

The report followed a visit last week by Deputy Sec. Gen. Shiotaro Yachi 
of the Japanese cabinet of ministers, who flew to Moscow Tuesday for 
consultations that continued until Thursday.

Russian authorities repeatedly maintain there is not enough oil available 
currently for export in eastern Siberia to justify both pipelines, and they 
insist that substantial investment is needed to develop the resources 
needed to supply the lines. (OGJ Online, May 30, 2003).

Japan is seeking Russian oil to reduce its dependence on crude oil 
imports from the Middle East, which in August was 88.6%, down 0.7 
percentage point from 
the year before. That dependence dropped to 83.4% in July.

Japan also is concerned about increased competition with China for oil. 
China became a net importer of oil in 1993 and in the coming decade will 
likely overtake Japan as the world's second-largest importer of oil.


 
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