The Eastern Siberia-Pacific Ocean Pipeline System: A View from Inside. October 5,

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1 The Eastern Siberia-Pacific Ocean Pipeline System: A View from Inside October 5,

2 Tyumen Oblast R U S S I A Talakanskoye Yakutia Yamal Kovykta Verkhne -Chonskoye Irkutsk Oblast U K R A I N E T U R K E Y K A Z A K H S T A N C H I N A J A P A N 2

3 Demand for Oil in the Asia-Pacific Region billions of tons 2 1 Russian Oil

4 The Energy Strategy of Russia envisions creating an Eastern Siberian oil export route, which would promote the formation of a new oil production center in Eastern Siberia and Russia s entry into the Asia-Pacific energy market. In December 2005, within the framework of the strategy s realization, the Government of Russia adopted a resolution for construction of the ESPO. 4

5 Goals: To diversify markets and directions for oil and gas supplies To develop hydrocarbon accumulations To expand the oil and gas industry To develop territories of the Russian Federation 5

6 Urengoy R U S S I A Magadan Surgut Yakutsk Okhotskoye Sea Yurubchenskoye Omsk Tomsk Novosibirsk Krasnoyarsk Taishet Angarsk Chita Tynda Komsomolsk -na-amure Khabarovsk Blagoveshensk Irkutsk Ulan-Ude Vladivostok M O N G O L I A Japan Sea J A P A N C H I N A K O R E A 6

7 R U S S I A Yakutsk Lensk Sakhalin Island Vitim Nerungri Ust-Ilimsk Tynda Komsomolsk -na-amure Taishet Bratsk L e n a Skovorodino Khabarovsk Irkutsk Angarsk Ulan-Ude Chita Blagoveshensk M O N G O L I A C H I N A Vladivostok Nakhodka 7

8 Yakutsk Kuyumba L e n a Verhnechonskoye Lensk Sakhalin Island Angara Vitim Nerungri Ust-Ilinsk Tynda Komsomolsk -na-amure Taishet Bratsk L e n a Skovorodino Angarsk Baykal Lake Ulan-Ude Chita Blagoveshensk Irkutsk Vladivostok Nakhodka 8

9 First phase Taishet-Skovorodino: Length 2,750 km Swampland 435 km Rockbed 1,000 km Permafrost Rockslide Tectonic faults Ice hillocks Thermokarst Landslides Temperatures to -50C to -55C 9

10 Distinctive features of the project: Seismicity to 9 points Tectonic faults Inclines and declivities of more than 20 degrees 10

11 Technical demands: Special steel Automated welding Duplicate and repeated controls 11

12 Obstacles in the project: Unoccupied territory Transportation inaccessibility Absence of inert materials 12

13 Lensk Olekminsk Kirensk Tynda Taishet Ust-Kut Skovorodino Total: 318 kilometers in an annual program of 1,200 kilometers 13

14 Trench development during preliminary ripping operations using explosives 14

15 Stroytransgaz certificate of compliance with Transcert standards 15

16 Number of workers 2,500 Basic construction equipment (items) 220 welding tractors 70 pipe carriers and dump trucks 400 pipe-welding stations BTS CRC-Evans AW welding complexes 3 Innershields 8 STT heads 16 M-300 heads 28 Electric welders

17 Natural preservation methods: Utilization of waste material Recultivation Technical monitoring Use of particularly durable pipe Reduction of distance between valves Installation of sensors for early discovery of oil leaks Use of pipe with 16 mm - 24 mm wall thickness Use of pipe with 22 mm - 27 mm wall thickness for underwater passage Creation of an emergency unit Professional training of personnel 17

18 CONCLUSIONS 1. Construction of the ESPO will enable Russia to diversify its hydrocarbon streams and promote industrial expansion in Eastern Siberia. 2. The project has no analogy in industrial practice worldwide. 3. Construction of the ESPO is being carried out in full compliance with Russia s environmental legislation and under conditions of heightened attention from governmental bodies charged with environmental control, community environmentalists, and international environmental auditors. 4. Stroytransgaz is constructing the most complicated segments of the ESPO. They make up about 30% of the total annual startup of the facility. 18

19 Thank you! 19

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