Russia: Putin Says Oil Pipeline Will Reach Far East Coast

Russian President Vladimir Putin today announced plans to build a pipeline  that links the oil-rich region of Siberia to the Pacific coast. Putin says the pipeline  eventually will supply some 80 million tons of oil per year to world markets -- including  Japan. The announcement came as Putin prepared to meet in Tokyo with Japanese Prime  Minister Junichiro Koizumi today. Trade ties have been bolstered as a result of  Putin's three-day visit to Japan. But there has been little concrete progress on a  60-year-old territorial dispute over the islands known in Japan as the "Northern Territories"  and in Russia as the "Southern Kuriles."

Prague, 21 November 2005 (RFE/RL) -- Russian President Vladimir Putin has been trying to calm concerns in Tokyo that China will benefit the most from a planned oil pipeline out of Siberia.

Speaking on Monday at a forum in Tokyo for Russian and Japanese investors, Putin announced that Moscow intends to build the pipeline all the way to Russia's far east coast: "Construction of the pipeline from East Siberia to the Pacific Ocean opens up great prospects. We plan to build the pipeline to the Pacific coast with eventual supplies to the Asia-Pacific region, including Japan."

Under the scenario that Tokyo officials consider ideal, the pipeline would carry up to 1.6 million barrels each day to a port close to Japan. Putin says the project will benefit all countries in the Asia-Pacific that become involved: "I'm sure the project will consolidate the energy infrastructure of the entire [Asia-Pacific] region and will give the national economies here new competitive properties."

Dave Ernsberger is the editorial director for Asia at Platt's -- a global information service for the energy industry. Ernsberger told RFE/RL from Singapore that Japan has sought guarantees that the Russian pipeline would go to the far east coast rather than end in oil-hungry China:.

"Russia and Japan and China have been involved in sort of a three-way tussle to get an oil pipeline out to the Pacific coast for a number of years now," he said. "Three or four years. In some ways, this looks like it may just be the latest in some of the positioning by Russia to play Japan and China off against each other. For most of this year, Japan has been a little bit irritated because Russia has been very friendly with China on these pipeline issues. It seems like, maybe, now that we are seeing a little bit of a change."

Ernsberger says many industry analysts expect the pipeline to terminate near Russia's far east town of Nakhodka about 100 kilometers east of Vladivostok: "For Japan, this is an absolute paramount issue in their foreign policy -- this attempt to get Russia to commit to a long-term future supply in Japan with its oil. Japan is now only the third largest consumer of oil -- behind China and the United States. But it is still the second biggest importer of oil. It's far ahead of China in terms of its actual imports of crude oil. Japan has virtually no natural resources of its own. For them, Russia -- and Russian oil and natural gas in particular -- is a key strategic partner in that. And they need those resources devoted to them."

Putin made it clear at today's economic forum that in return for extending the pipeline to the far east coast, Russia wants Japanese firms to invest more money in Siberia's oil industry infrastructure -- as well in Russia's fast-growing machinery and high-tech sectors. But Ernsberger says Moscow also is looking for more than just financial support for its oil sector: "In this day and age, Russia plays this scenario much like any other country that has large amounts of resources that it can sell profitably but relatively few outlets to actually take it to the market. Like any other country in that position, what Russia is really looking for is the best possible deal of all. That's not just cheap financing from Japan. But it's also a whole host of other things -- like support in the United Nations, support in their positioning on World Trade Organization issues. Basically, an alliance of sorts, that goes beyond just the pipeline itself, both financially, politically."

Shortly after Putin's announcement on the pipeline, Japanese Prime Minister Junichiro Koizumi announced that Tokyo will support Russia's bid to join the World Trade Organization. It was a move welcomed by Putin, who said: "I'm absolutely confident that Russia's accession to this influential organization [World Trade Organization] will help strengthen our business ties with Japan and make them more stable and more predictable."

Koizumi and Putin also agreed today to work together more closely to solve a dispute over control of four Pacific islands that were seized by Soviet forces at the end of World War II. The 60-year-old dispute has prevented Moscow and Tokyo from signing a peace treaty.