12 november 2008

Vladimir Putin held a meeting with Transneft CEO Nikolai Tokarev

The agenda included a long-term programme for Transneft’s development over the next 10 to12 years and such major projects as the construction of East Siberia-Pacific pipeline, the Baltic Pipeline System (BPS 2) and the Burgas-Alexandroupolis project.

Transcript of the opening

Nikolai Tokarev: Mr Putin, I would like to make a brief report on Transneft's short-term development programme and immediate objectives.

Vladimir Putin: What about the Burgas-Alexandroupolis, Pacific and other major projects?

Nikolai Tokarev: We have drafted a long-term programme for 10 to 12 years, which proceeds from national goals and all relevant Government decisions and instructions.

The programme's aim is to diversify oil exports and to enable the company to quickly shift them from East to West whenever necessary. We will also increase the pumping capacity of all our pipelines. This will accelerate supplies to Russian oil processing plants and so boost their output.

The programme consists of two parts. Investment is the more difficult and ambitious. It involves the projects Transneft has launched or is about to launch. The second part concerns modernisation, reconstruction and repair of pipelines. It is a big job but it only supplements the investment programme.

Now, for construction work, starting with the East Siberia-Pacific pipeline: The construction of its initial stage is finishing. We started the reversal of a 1,100 km stretch on October 4 to supply oil from the Talakan-Verkhynechonsky field to Taishet. Pipes have been laid along the 1,000 km Aldan-Skovorodino stretch. The company is working on construction sites and pumping stations. A 600 km linear pipeline portion is under construction in the south of Yakutia. That's where we have concentrated the most resources. There is also the Kozmino oil-loading seaport.

The 600 km stretch is one of the hardest jobs with no transport and social infrastructure to speak of. Nevertheless, we are sure we'll meet the deadline. We are doing everything we can. There is no shortage of personnel, technologies and funding for this and next year.

We are ready with a technical and economic assessment of the East Siberia-Pacific pipeline and are coordinating blueprints with all the regions the pipeline will cross. This includes holding public debates. We will finish the job before the end of the year, and shift the emphasis to the second stretch when the first is ready.

We expect to finish the first stage of construction in December 2009 and immediately start laying the second stage.

Vladimir Putin: How long is it?

Nikolai Tokarev: 2,100 km. Construction will finish toward the end of 2013 or at the start of 2014.

The second stage of the Baltic Pipeline System, known as BPS 2, will come next. Its design is ready, and we have done everything to start construction. The Government has drafted a resolution on starting supplies to the pipeline. We are absolutely ready. Funding is our only problem. This topic demands a separate discussion.

The Burgas-Alexandroupolis is in the best situation of all our projects, I think. The work is going on according to a schedule coordinated by all partners, Bulgarian, Greek and Russian. A managing company has been established with Greek and Bulgarian branches. We have appointed technical and financial consultants. Germany's ILF Co., our present technical consultant, is updating the technical and economic documentation it prepared some time ago. The pipeline route has changed since then, and several facilities have been built along it, so the documents are somewhat outdated.

All preparations will finish by the middle of next year, and it will be possible to shift to practical work. 700 billion roubles have been earmarked for the general Transneft construction programme until 2020.

Vladimir Putin: BPS-2 will finish in Ust-Luga, if I am not mistaken?

Nikolai Tokarev: That's right.

The line has turned to Ust-Luga by now, and preparations are on to incorporate the stretch into the general project assessment.