Construction of Skovorodino terminal pump station completed

ITAR-TASS, 16.12.2009

IRKUTSK, December 16 (Itar-Tass) —— Builders have completed the construction of the terminal pump station near the town of Skovorodino (Amur region), an official at the Directorate of the Stroytransgaz contractor company’s branch told Itar-Tass on Wednesday.

The terminal is the final oil pumping station of the East Siberia – Pacific Ocean (ESPO) oil pipeline, the official said.

The Skovorodino terminal was built to transport oil from deposits in Western Siberia and the Krasnoyarsk Territory through the Taishet terminal, as well as hydrocarbons from fields in the Irkutsk region and the Republic of Sakha (Yakutia).

The Skovorodino terminal has six tanks with a capacity of 50,000 cubic metres each and two 5,000-tonne tanks.

In order to guarantee environmental safety, facilities were constructed for biological treatment of sewage water and an oil collection vessel was built to protect underground waters from incidental oil leaks, the official said.

The terminal also includes external power supply facilities – a power substation and two electric transmission lines with a total length of 23 kilometres.

Simultaneously with the end of construction, workers began the terminal’s loading tanks and process pipelines with oil that comes from the west through the ESPO pipeline.

The first ESPO pipeline will be commissioned on December 29.

ESPO-1 project envisages further oil transportation by railway from the Skovorodino terminal to the seaport Kozmino located on the Pacific Ocean coast. Another direction is China. Russia will supply oil from Skovorodino to China through a 63-kilometre extension, which is under construction.

The total capacity of the ESPO-1 project is 30 million tonnes a year.

The East Siberia – Pacific Ocean oil pipeline is a planned pipeline system to export Russian crude oil to the Asia-Pacific markets (Japan, China, Korea). The pipeline is to be built and operated by Russian pipeline company Transneft.

The original project of this pipeline was proposed by Russian oil company YUKOS in 2001 as an independent oil pipeline. In May 2003, the Russian government decided to combine these projects and that Transneft would be in charge of the pipeline, while YUKOS would supply the oil. In 2003, Russia and China signed an agreement on construction of the pipeline.

Construction of the pipeline started in April 2006.

In February 2009, Russia and China initialled an agreement, which envisages the construction of a 67-kilometre segment of the ESPO oil pipeline. Construction of the spur to China started in the Russian territory in April 2008 and in Chinese territory in May 2009. In April, the sides signed the document that provides for Chinese loans of 10 billion U.S. dollars and 15 billion U.S. dollars to Transneft and Rosneft respectively. Russia is expected to start annual deliveries of 15 million tonnes of crude to China through the ESPO outlet in 2011.

The cost of the construction of the Russian part is estimated at 10 billion roubles (USD 1 = RUB 30.19).

According to the project, an annual transportation of hydrocarbons through the ESPO-1 network will make up 30 million tonnes. A half of that amount will be transported through the constructed underground stretch to China, and another half will be delivered by the TransSiberia Railway to the Kozmino oil port, which is under construction on the Pacific Ocean coast.

The second stage of the ESPO pipeline will run through the Amur region, the Jewish Autonomous Region, Khabarovsk and Primorsky territories. The port in Kozmino will be the final point in the ESPO oil pipeline.