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Russia in capacity crunch


Putin criticises slow pace on new pipelines



By Upstream staff 

Russian President Vladimir Putin said ministers must approve new crude oil export routes faster, criticising officials for taking years to give the green light for pipeline plans.

Crude production in the world's second-largest oil exporter has boomed over the past five years - reaching a post-Soviet peak of 9.01 million barrels per day last month - but its main export arteries are currently running at capacity.

Pumping more Russian oil into the global market would enable Moscow to cash in on current runaway crude prices and help consumers diversify away from suppliers in the unstable Middle East - a particular concern of the US.

"The government has been unable to determine its priorities for some time, while this issue should have been solved a long time ago," Putin told both houses of parliament in his annual state of the nation address.

He added: "I mean by this diversifying deliveries... increasing the capacity of the Baltic pipeline system, launching a pipeline from western Siberia to the Barents Sea, deciding on a pipeline route to fields in eastern Siberia, getting around the Bosphorus and Dardanelles straits, integrating the Druzhba and Adria pipelines."

Putin's comments should help crude pipeline monopoly Transneft, which needs government approval for new projects but says ministers do not give its plans enough urgency.

Transneft's main pipelines have already hit top capacity at 4 million barrels per day, and the monopoly is keen to develop alternative routes without transiting other countries.


Wednesday, 26 May, 2004, 11:46 GMT  | last updated: Thursday, 28 April, 2005, 14:30 GMT

Red tape: Russian President Vladimir Putin wants new pipe projects expedited quicker
 

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