TOKYO - Japan threatened Thursday to withdraw its financial aid to a Russian pipeline linking east Siberian oil fields with the Pacific, unless it was given preference over China in the project.
Tokyo's position was presented by Shoichi Nakagawa, minister of economy, trade and industry, when he met with Russian Industry and Energy Minister Viktor Khristenko here Thursday, according to a Japanese official.
Khristenko earlier suggested to Japanese journalists in Moscow that Russia would build a branch oil pipeline to China before completing the main pipeline that would cater to the Japanese market, press reports said.
Japan and China -- both predicting a dire need for future energy supplies -- have fought furiously for the right to access Russia's untapped oil reserves.
Tokyo won the upper hand after a protracted diplomatic battle when the Russian government late last year sided with the more expensive but potentially more profitable Pacific coast pipeline option.
In the meeting with the Russian minister, Nakagawa strongly requested that the Pacific route pipeline be built first, the trade ministry official was quoted by Japanese media as saying.
Nakagawa added it would be difficult for Japan to provide financial aid to the project if the Chinese branch came first, making it doubtful if the main pipeline to near Nakhodka would be definitely completed, the official said.
Khristenko was quoted as replying without making any commitment that "we will make a decision by assessing the situation."
Khristenko confirmed that both the Pacific route and the China branch would make up the "final form" of the entire pipeline.
The two ministers agreed that their two countries would continue discussions on the pipeline project through meetings of experts and other frameworks, according to the official.
The Russian plan provides for the construction of a 4,118-kilometer (2,559-mile) pipeline linking Taishet near Lake Baikal with Perevoznaya near Nakhodka.
In the first phase of the project, the pipeline will be laid from Taishet to Skovorodino near the Russian-Chinese border. A China branch could stretch from the border area.
Japan has offered financial assistance for the project, which would make Japan the nearest overseas market for the Siberian oil.
The pipeline will have 44 oil-pumping stations in between, and could transport up to 80 million tonnes a year for shipments to China, Japan, South Korea, Indonesia and Australia.
The project is estimated to cost 15 billion dollars, although some analysts have forecast a price of 16 billion dollars and possibly more.
The Russian energy ministry is reportedly scheduled to submit details on the pipeline project to the Russian government by May 1.
The Nakagawa-Khristenko talks came ahead of a full trade and economic meeting here on Friday between the two governments to be co-chaired by Japanese Foreign Minister Nobutaka Machimura and Khristenko.
04/21/2005 17:25 GMT