[Goldfisch]

Saturday July 9, 2005

Putin promises Russia will increase oil exports

GLENEAGLES, Scotland (AP) - Russia will increase its oil exports, President Vladimir Putin promised at the summit of G-8 leaders, and said that energy policy would be a key theme of the nation's G-8 presidency in 2006.

"Russia is constantly increasing the supply to world markets,'' he told reporters Friday at a briefing following the conclusion of the Gleneagles summit.

At present, Russia produces about 470 million metric tons, of which 230 million metric tons are exported. Putin said this figure would rise to between 250 and 270 million metric tons.

"We will increase our supply of crude and work to develop nuclear energy,'' he said.

He gave no timeline for the increase, but described a series of projects under way to augment Russia's energy transport capacity - its perpetual Achilles heel.

Russia's capacity to export its abundant oil and natural gas supplies has been hobbled by its limited and obsolete pipeline system. To boost that capacity, it will have to invest in infrastructure upgrades, in particular in the area of liquefied gas transport and completion of oil pipelines to terminals where large tankers could be accommodated.

Putin said he had promised his fellow G-8 leaders that Moscow would do its utmost to provide enough transport infrastructure to supply energy to its partners, both pipelines and railways.

Putin described the plans for constructing a pipeline to Far East Russia, which would reach both China and the Pacific Coast for shipment onwards to Japan, and from Siberia to the White Sea to supply a sufficient amount of Russian crude to the North American market.

He said China would be supplied with about 20 million metric tons of oil a year, and Japan - which would be supplied by rail for part of the stretch - with about 10 million metric tons.

He also talked about Russia's participation in the Baltic Pipeline system and gas routes to the North and westward to Germany - though Moscow is still trying to hammer out a deal with transit country Ukraine.

"We are ready to cooperate with Ukraine if it does not steal gas from us,'' he said, repeating allegations that Ukraine had been siphoning off Russia's gas.

Putin said Russia would increase its gas production by 40 billion cubic meters by 2010 - a 6.5 percent boost - and that a considerable portion of it would go the markets.

He also discussed new technologies harnessed to produce liquefied gas, saying that Russia hoped to be competitive on the North American LNG market. - AP