The fate of the Russian Barents Sea oil pipeline

Publish date: February 14, 2006

Russian oil pipeline monopoly Transneft states that a technical and economic feasibility study on the construction of an oil pipeline to the Barents Sea coast and a terminal in the settlement of Indiga will be presented by the end of the year.

Preliminary studies do however show that the amount of oil available for the project could be too little, BarentsObserver reported. The last years’ build-up of oil export infrastructure in the Russian North could have made the construction of the pipeline and terminal project superfluous. Transneft seriously started to study the project in spring 2004, when experts found a suited site for the export terminal.

One year ago deputy head of the company, Sergey Grigoriev, said that his company could construct the pipeline from Kharyaga to Indiga, as well as the terminal, within 2 years. According to him, construction costs would amount to 2.1 billion dollars. Transneft has made significant changes in the project since then. Projected capacity of the pipeline is now decreased from 24 million tons per year to 12 million tons. The estimated price for the construction is also significantly increased. The expected cost of the project is 3.5 billion dollars.