Japan, China Struggle Over Siberian Oil Pipeline
Route
Japan has proposed to Russia that it build its new Siberian
pipeline to the Siberian port of Nakhodka, bypassing China.
This plan is in conflict with China's plan, which is for
the oil pipeline to end at Daqing in China. The conflict
has put Russia in the enviable position of being courted
by the two largest oil-consuming nations in Asia, China
and Japan. Both are anxious to expand oil sources from
outside the Middle East, an area which is seen as being
too politically volatile and insecure.
In May, China signed an 25-year
oil supply agreement with Yukos, which would transport
US$150 billion of oil via a pipeline beginning in Angarsk
in Russia and ending in Daqing in China. It is estimated
that the pipeline would cost US$2.5 billion to construct.
Lately, Japan has made a rival financial package of US$7
billion to cover construction of a rival pipeline to Nakhodka,
and development of Siberian oil fields.
While Yukos has thrown its backing to the Chinese route,
Russian prime minister Mikhail Kasyanov, on a visit to
China in September, said that no final decision had been
made on the pipeline route. The Russian energy minister,
Igor Yusufov, said that the Japanese were ready to finance
most of the costs of construction and had agreed to not
to seek a Russian government guarantee.
Over the past year, the Japanese have lobbied heavily
for the Nakhodka route, saying that it would lessen Russia's
reliance on on a one-country destination. They argue that
it would be easy for ships to distribute to all of Asia
from a port distribution center at Nakhodka. Allied with
the Japanese are Transneft, the Russian state-owned pipeline
operator and Rosneft, the state-owned oil group.
Over the past two years, China has become a serious energy
consumer nation. China's oil
imports have surged, buoyed by private car
sales, which has in turn forced the government to
secure overseas energy sources and speed up natural
gas exploration . In addition to oil, China has lately
experienced an electricity
shortage.
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