BELARUS NEWS AND ANALYSIS

DATE:

02/12/2008

Russia Builds Pipeline around Belarus

Russian Prime Minister Vladimir Putin signed Decree No. 1754-r on December 1 on the design and construction of the second line of the Baltic Pipeline System from Unecha, Bryansk Region, to Ust-Luga, Leningrad Region, according to the official press release published on the Russian government website. It had been previously repeatedly stated that the second line would connect Unecha with Primorsk.

The second line of the Baltic Pipeline System will be an alternate to the Druzhba (Friendship) line for transport of oil to the European Union. It will have a capacity of 50 million tons of oil per year and will stretch 1300 km. The line will be financed by an issue of long-term Transneft bonds in rubles. A closed subscription among financial organizations is planned for the bond issue with predominant state participation.

Transneft proposed the construction of a second line of the Baltic Pipeline System in January 2007, after Russia and Belarus experienced a disagreement over oil deliveries. Belarus imposed transit duties on crude oil, and Russia closed the Druzhba pipeline in response, only to reopen it later. The Russian government approved the second line in May 2007. Transneft transports 93 percent of the oil produced in Russia. The state owns 78.1 percent of the company.

Source:

http://www.kommersant.com/p-13668/r_529/oil_production_transport/

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