MOSCOW, Jan 26 (AFP) - Russia's Transneft pipeline monopoly said Wednesday it had started to plan the construction of a line from the Siberian oil fields to the Sea of Japan with another branch potentially later leading to China.
Transneft head Simon Vainshtock told Russian President Vladimir Putin that the first branch of the pipeline would run from Taishet in Siberia's Irkutsk region to the town of Skovorodino some 1,600 kilometers (960 miles) to the east near China's border.
"We already have drafts" for the project, news agencies quoted Vainshtock as telling Russia's president.
Japan and China, both starving for future energy supplies, have fought furiously for the right to access Russia's untapped oil reserves.
Tokyo won out after a protracted diplomatic battle over Beijing when the Russian government late last year sided with the more expensive but potentially more profitable Japanese option.
Russia's government had initially wanted to run finish the line at the bustling port of Nakhodka before unexpectedly changing its mind and deciding to run the oil to Perevoznaya -- a decision that prompted fury from environmentalists because the port is marked as a nature reserve.
Perevoznaya is the end line of a rail link from Siberia that initially will be used to export the first oil to cover construction costs and the government may yet decide to build the second half of the pipeline itself to the Nakhodka port.
The Chinese branch meanwhile was backed by the out-of-favor Yukos oil company, which Russia is dismantling to pay off back taxes. It was turned down as a first option by Moscow because a sea route presented more potential buyers.
Russia now has only a vague commitment to build a branch from the Japanese pipeline to China by 2020. But Moscow officials have hinted that Beijing would have to come up with the financing if it wanted the oil.
Deputy Prime Minister Viktor Khristenko pointed out in an recent interview with the Vedomosti daily that Skovorodino, the intermittent point, lies only 70 kilometers north of the Chinese border.
"An option for a Chinese branch still remains," said Khristenko, who holds Russia's energy brief.
Financing for the Japanese branch also remains unclear, the Russian government announcing last week it would not guarantee any loans for the project.
The statement was issued three days after January 14 talks on the massive pipeline between visiting Japanese Foreign Minister Nobutaka Machimura and Khristenko.
Khristenko said Russia expected "cheap loans from both within and abroad" to build the pipeline.
The project is estimated to cost 12 billion dollars (nine billion euros) although some analysts have forecast a price of 16 billion dollars and possibly more.
Tokyo has offered to provide seven billion dollars in soft loans for the pipeline and make further investments in Far Eastern Russia, which has been shunned by Japanese companies because the two nations have yet to sign a peace treaty ending World War II due to a lingering border dispute.
The Kommersant business daily has reported that Russia may give Japanese companies the right to develop new oil fields in Siberia but that a final decision still had to be made by the government.
Russia has admitted that existing oil fields will not be able to feed the pipe to its full supply of 80 million tonnes a year and ITAR-TASS reported that Moscow may offer countries like Japan, China and South Korea to launch joint ventures to prospect eastern Siberia for new oil.
No Russian company or bank has yet volunteered to help construct the pipeline, which would be operated by Transneft.
01/26/2005 14:44 GMT - AFP