Pipeline to Connect West Siberia with Murmansk Region to Be Developed by Starstroy Company

According to the press service of the Governor of the Murmansk Region, quoting a statement mouthed at a meeting of the working commission for choosing a site for oil terminal in the Kola Peninsula, the projected pipeline to connect West Siberia with the region will be designed by the Starstroy company.

Starstroy was commissioned to develop the project by the LUKoil, YUKOS, TNK, Sibneft, and Surgutneftegaz oil companies, which signed a Memorandum of Understanding concerning the matter on November 27, 2002. As projected, the annual throughput of the pipe may eventually reach 120 million tonnes. The commission expects precise data to finalise its decision as to where the terminal, which is to be connected with arctic shelf oilfields in Siberia, will be placed.

The Starstroy company previously was the developer and took part in the construction of oil pipelines under the Sakhalin-1 and Sakhalin-2 projects. Once the participants come up with a Declaration of Intent, supposedly in April 2003, they will finalise the pertinent commercial matters, such as guarantees, financing, budget, capital sharing, admission of other parties to the use of the pipe, and such. The construction of the pipeline is expected to begin in 2004 and be completed in 2007, initial annual throughput reaching 80 million tonnes. Most of the oil to be transported through the pipeline is intended to be exported to Western Europe and North America. The cost of the project is estimated at between USD 3.4 and 4.4 billion.

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