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Wednesday, April 26, 2006

Putin calls for oil refinery on border in Russia's Far East

TOMSK, April 26 (RIA Novosti) - President Vladimir Putin said Wednesday that construction of an oil refinery on the border in Russia's Far East would help derive maximum profits from a proposed oil pipeline in the region. Putin said the scale of the mooted $11.5 billion East Siberia-Pacific pipeline was unprecedented and would open up new markets, while an oil refinery would make sure the pipeline produced maximum possible benefits. "We should consider in advance the construction of an oil refinery complex, plants and enterprises in Russia so that our economy will maximally benefit from the country's export capabilities," Putin said at a meeting with regional governors in the Western Siberian oil city of Tomsk ahead of a meeting with German Chancellor Angela Merkel. Putin cited data from the Ministry of Economic Development and Trade that estimated the cost of the refinery at between $2.19 billion and $2.92 billion, and said state-owned oil company Rosneft could start construction next year. Earlier this month, Rosneft Vice President Alexei Kuznetsov said the company had been considering constructing of an oil refinery on the pipeline, which will be operated by state-owned oil pipeline monopoly Transneft, and that it would have output capacity of 20 million tons per year. The pipeline is slated to pump up to 80 million metric tons a year (1.6 mln of bbl/d) from Siberia to the Russian Far East before being sent on to the Asia-Pacific region, in particular to energy-hungry China. The first stage of construction was initially expected to be completed by the end of 2008. Transneft boss Semyon Vainshtok said Wednesday that construction could start as soon as the end of this week.

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