Actuality March 4, 2008

   Federal Tariffs Service (FTS) submitted for the government consideration the tariff rate for oil pumping through the pipeline system Eastern Siberia – Pacific Ocean (ESPO pipeline) – $38,8 per ton from Taishet to Skovorodino (end points of the first ESPO pipeline queue). Experts mark that with such tariff oil supplies to China become more profitable for oilmen, than to another countries of Asia-Pacific Region (APR), although it was planned to make them equally effective from the start.

   FTS passed its suggestions to the government about the tariff rate for oil pumping through ESPO pipeline. FTS received the order to present the forecasting tariff by March, 1 on February, 12 on the meeting with the vice-prime minister Sergey Naryshkin, who supervises pipeline construction. According to the administration head of regulation of oil and gas industries of FTS Denis Volkov, the forecasting tariff on the Taishet – Skovorodino section (first queue of ESPO pipeline) makes up $38,8 per ton. The tariff to the end point of ESPO pipeline – Kozmino bay (Primorsky Kray) – after completion of ESPO – 2 pipeline construction will be the same. Until ESPO – 2 pipeline will not be constructed (the government did not take decision yet about the terms of project realization, and first queue of ESPO pipeline will be put into operation only at the end of 2009), it is assumed to transport oil to Kozmino by railway. However, as Denis Volkov explained, in the offered by FTS tariff the cost of railway oil transportation from Skovorodino to Kozmino is not included.

   Construction of the first queue of ESPO pipeline supposes the oil pipeline laying from Taishet (Irkutsk Region) to Skovorodino (Amur Region, 70 km from the Chinese border). The pipeline capacity is 30 million tons of oil a year. Construction should be completed at the end of 2009. By this moment should be completed the construction of transshipment terminal in Kozmino bay also. It is assumed to supply oil from Skovorodino therein by railway. Also, it is planned to construct the oil pipeline 70-km long from Skovorodino up to Chinese border.

   In March, 2007 the ex-head of Transneft Semen Vaynshtok (left the company in September, 2007) said that the agreement about tariff determination for oil transportation from Skovorodino to Kozmino is already reached with JSC Russian Railways – $25 per ton. In JSC Russian Railways confirmed that the stated by FTS tariff does not include the cost of railway transportations, but added that the transportation cost to Kozmino is not agreed yet. However, in JSC Russian Railways did not state the forecasting level of tariff.

   In Transneft did not comment FST offers. However, in 2007 in the company supposed that cost of oil transportation to Skovorodino and to Kozmino will be the same (taking into account the railway tariff). "So, we deprived China even of the hypothetical opportunity to reduce the price of our oil. And if they do not pay the market price, the companies will transport oil to Kozmino at the same price", Semen Vaynshtok said.

   Rosneft should become the main supplier of oil to ESPO pipeline. The company already declared that it is displeased with oil prices, which China offers it now, to which Rosneft supplies 9 million tons of oil by railway a year. Yesterday in Rosneft declined to discuss the tariff, offered by FTS, having marked that consider it. But the source in the company considers that the offered tariff takes into account the opinion of oil companies. In the company did not report, what direction is considered the priority – China or other APR countries. However, Rosneft was not going to limit oneself to supplies through ESPO pipeline to China until now, speaking about the plans to construct oil refinery in Kozmino with the capacity 20 million tons.

   "Oilmen had two directions of supplies through ESPO pipeline, but now China looks more preferable", marks Konstantin Cherepanov, the analyst of KIT Finance Investment Company. He is also sure that in the future the government will correct the tariff, as in the current version it "does not fit into energy policy of Russia that supposes flexibility of supplies". Valery Nesterov from Troika Dialog is also sure that the tariff changes. The analyst marks that ESPO pipeline can grow in price and in future the network tariff will be used due to which grows the cost of oil transportation to the West at the price reduction in the East direction.

   Kozmino bay is the new end point of ESPO pipeline. The corresponding order was signed by the prime minister of the Russian Federation Viktor Zubkov on February, 27, reported the press-service of the government. According to the document, the route changes from the primary Taishet-Skovorodino-Perevoznaya bay (Primorsky Kray) to Taishet-Skovorodino-Kozmino bay. In fact, the route, approved by the government in 2005, was changed in 2006. First it was decided to lay the pipeline round about Lake Baikal, that elongated the route by 500 km, and then to move the end point from Perevoznaya bay to Kozmino bay. But the government did not take the decision to document the change of route until now.