Publication: Eurasia Daily Monitor Volume: 2 Issue: 72

Although the Russian government has announced what was seen as a final decision for a Japan-bound Pacific oil pipeline route, some recent statements by the country’s top officials suggest otherwise.

According to Kremlin chief of staff Dmitry Medvedev, Pacific oil pipeline plans are to be finalized by May 1 (Ekspert, April 4). During his recent interview, Medvedev warned against replicating giant, inefficient Soviet-style projects like the Baikal-Amur railway, saying, “We do not need yet another huge construction project with an unpredictable outcome…Now we need to determine the economic viability of construction.”

Medvedev described the Taishet-Skovorodino-Perevoznaya Bay pipeline as a “mega-project that would be capable of boosting the development of Siberia and the Far East.” “If we do not develop the East, Russia will not be unified,” he said.

Medvedev conceded that the relative underdevelopment of Siberia and the Far East could eventually undermine Russia’s territorial integrity. “Otherwise it would be developed by someone other than us,” he warned.

Moreover, other officials have indicated that the fate of the Pacific oil pipeline route could be decided even later than May 1. Oleg Gordeyev, deputy head of Russia’s energy agency seemed to hedge recently by saying, “The government will make a final decision on the Taishet-Pacific oil pipeline in the first half of 2005” (Prime-Tass, April 8). Therefore, the final verdict on the pipeline’s route could still be postponed until late June.

Russia’s latest pipeline-related rhetoric followed what was widely viewed as the final decision on the Pacific oil pipeline. On December 31, 2004, Russian Prime Minister Mikhail Fradkov approved the Taishet-Nakhodka pipeline blueprint.

The pipeline would go from Taishet to the Perevoznaya Bay terminal in the port of Nakhodka, crossing Russia’s Irkutsk, Chita, Amur, Buryat, and Primor regions. The Taishet-Nakhodka route would be some 4,130-kilometers long, and its estimated cost could exceed $10 billion. The annual capacity of the East Siberia-Pacific pipeline system is expected to reach 80 million tons.

As the fate of a Japan-bound oil pipeline suddenly became unclear, Tokyo lost little time in making gestures towards Moscow. Japanese Foreign Minister Nobutaka Machimura pledged to achieve progress in solving the territorial dispute with Russia over the Kuril Islands this year. “We would like to take one or two steps ahead and try to lay a foundation for further progress in the peace treaty negotiations during Russian President Vladimir Putin’s visit to Japan,” Machimura told Interfax news agency (Interfax, April 11).

Furthermore, a Japanese mission, including representatives of Tokyo-Mitsubishi Bank, Japan’s Bank of International Cooperation (JBIC), Itocu, Tokyo Gaz, and Nippon Steel, was promptly dispatched to Russia’s Far East.

On April 11, Primor governor Sergei Darkin met with the Japanese mission to discuss joint projects, including the Pacific pipeline. The Japanese businessmen reportedly indicated their interest in building an oil refinery at the site proposed for the on-shore oil terminal (Vostok-Media, April 11).

In the meantime, environmental activists have sought Japanese assistance to review the pipeline’s route. Last March, some 40 environmental groups wrote a letter to Japan’s Prime Minister Junichiro Koizumi and argued that Russia needed to change the route of the Pacific oil pipeline, which would pass through protected nature reserves near Perevoznaya Bay.

Moreover, Nikolai Markovtsev, a member of the Primor regional parliament, claimed that Fradkov’s December 31 decision was illegal, as the project had not been subjected to an environmental impact statement. Nezavisimaya gazeta quoted Markovtsev as saying that alternative routes envisioning Nakhodka, Olga, or Strelok Bays as the proposed on-shore terminus should be considered.

However, Governor Darkin did not hear the environmentalists, the daily commented. Nezavisimaya gazeta also claimed that firms affiliated with Darkin and unnamed officials in Moscow had purchased land near Perevoznaya Bay, giving them a personal stake in this site (Nezavisimaya gazeta, April 8).

Meanwhile, Moscow’s hints that a final decision on the Pacific oil pipeline route is yet to be made could also be a ruse to appease China, which had wanted the route to cross its territory. Earlier this month, the Kremlin dispatched a special mission to Beijing to explain Russia’s pipeline policy.

Officially, Russia insists it has no oil-related differences with China. “Russia and China have settled all problems regarding oil supplies to China,” said Viktor Ivanov during a trip to China earlier this month. Ivanov, an aide to President Putin reportedly clarified Russia’s December 31 decision on the Pacific oil pipeline. “This program fully corresponds with China’s aspirations,” he claimed, adding that construction of the pipeline’s branch from Skovorodino to China would allow Russia to increase crude supplies to China up to 20-30 million tons a year. Russia is to deliver 10 million tons of crude oil to China by rail, according to Ivanov. (RIA-Novosti, April 4).

Moscow has backed the Japan-bound pipeline, despite its pledges to develop a “strategic energy partnership” with China. Yet it remains to be seen whether planned oil exports to China by rail and a possible offshoot from the East Siberia-Pacific oil pipeline could serve as a substitute for the previously planned China-bound Angarsk-Daqing pipeline project.