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Russia mulls low tariff for oil pipeline to China
MOSCOW, March 3 |
MOSCOW, March 3 (Reuters) - Russia's tariff agency said on Monday it had proposed keeping a low fee for pumping crude through a 2,700-km (1,680-mile) pipeline to China, a move analysts said could be aimed at speeding up the delayed project.
Russia's pipeline monopoly Transneft (TRNF_p.RTS), which is building the 600,000 barrels per day pipeline from East Siberia to the Chinese border, has upped its forecast for the cost of the project, which will be launched in late 2009.
Russia's federal tariff service has proposed setting the fee at $38.8 per tonne, unchanged from its previous estimate, made before the project's costs almost doubled to over $12 billion, said Denis Volkov, head of the service's oil and gas department.
"This is today's estimate," Volkov told Reuters, adding that the preliminary proposal had been submitted to the government last week and could still be changed after discussions with relevant ministries.
He said the government has yet to reply to the suggestion. Last year, the economy ministry said the tariff would not exceed $50 per a tonne. Transneft declined to comment.
The tariff is crucial for the oil companies that will ship crude through the pipeline and for Transneft, which needs the fee to return the money it spends on building pipeline.
Transneft has revised the cost of the pipeline -- Russia's first oil link to Asia -- from the initial $6.6 billion after changing the route to make it longer and citing higher costs of pipes and services.
One analyst said the unchanged tariff was aimed at encouraging oil companies to invest in exploration in East Siberia, where Russia wants to focus production to replace dwindling output in West Siberian fields.
"The tariff was set at a level to make oil companies interested," said Valery Nesterov, an analyst at Troika Dialog investment bank in Moscow.
Transneft, which has initially planned to complete the pipeline by the end of this year, has said it was likely to delay the launch by at least nine months to the third quarter of 2009 due to slow construction work.
Russia's largest producer Rosneft (ROSN.MM) is expected to become the main crude supplier to the planned pipeline. Other oil firms developing deposits in East Siberia are Russia's fourth largest oil firm Surgut (SNGS.MM) and BP's Russian venture, TNK-BP TNBPI.RTS.
China is the world's No.2 oil consumer and Transneft has said the pipeline will allow Russia, the world's second-largest oil exporter, to make its exports more flexible and reroute volumes to Asian markets. (Reporting by Ekaterina Golubkova, writing by Tanya Mosolova and Guy Faulconbridge; Editing by Marguerita Choy)
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