September 22, 2008

Chinese Extension of Espo May Be Approved Soon – Energy Minister

MOSCOW. Sept 22 (Interfax) - A decision on building a Chinese extension of the East Siberia - Pacific Ocean (ESPO) oil pipeline may be made soon at negotiations with China, Russian Energy Minister Sergei Shmatko told the media after the Monday meeting of the federal government presidium.

"No decision to build an extension to China has yet been made. However, that may be done in the near future," he said.

Shmatko said that Russia and China have formed an energy group. Deputy Prime Minister Igor Sechin leads the group on behalf of Russia.

As for the transfer of 20% in the Kharyaga field to Zarubezhneft, the minister said, "A resolution to that effect has been passed. There are no confrontations. We will resolve the problem in the due course of events."

The minister also commented on ESPO transit charges. "Oil companies, among them Transneft, have made proposals concerning the maximum charges. A corporate agreement must be reached. We think the transportation will be profitable," he said.

The first segment of the ESPO, which ends in Skovorodino, will be launched this fall, Shmatko said.

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