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Russia to Slake China’s Thirst for Oil from Eastern Siberia

Meet the new ESPO pipeline, otherwise known as the Eastern Siberia – Pacific Ocean project, through which Russia has announced it will send upwards of 15 million tonnes per year (with a capacity of 30 tonnes) to China and other markets in Asia. Semyon Vainshtok of state pipeline monopoly Transneft was the big publicity star yesterday announcing that $6 billion dollars would be put into the project, and that only oil from new Eastern Siberian fields (which Rosneft recently got the licenses to develop from Yukos in forced auctions) would be sent to Asia, while the older, Western Siberian fields would continue to feed European demand. Rosneft has no plans to allow private firms to compete to supply China through these pipes. As a side note, the ESPO pipeline news comes right alongside a renewed attack from Transneft and its friends in the tax authority on the Caspian Pipeline Consortium, a joint-venture of Chevron and others that operates the only private pipeline in Russia. They’ve been slapped with back taxes of $290 million and Vainshtok wants to jack their tariffs up to $38 per metric ton of oil from the current $24.60.

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This oil was brought to you through state theft…

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Semyon Vainshtok, head of pipeline monopoly Transneft, signs a tube of the pipeline during his trip to Nerungri in Eastern Siberia (Reuters)

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