• Kyodo

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Japan is courting Russia to build a Siberia-to-Pacific pipeline, assuring the Russians the Japanese economy will have the capacity to absorb 1 million barrels of Russian oil per day, diplomatic sources said Thursday.

The Japanese made the assurance in a letter from Foreign Minister Yoriko Kawaguchi and Minister of Economy, Trade and Industry Takeo Hiranuma late last year, apparently in a bid to persuade Russia, which is committed to laying an oil pipeline to China, to build a pipeline closer to Japan.

Kawaguchi and Hiranuma told the Russians that Japan is willing to discuss financing the project, through low-cost loans from the Japan Bank for International Cooperation and financing through Japanese export credit insurance.

Japan sent a senior official of the Agency of Natural Resources and Energy in December to underscore Japan’s interest in the project.

Prime Minister Junichiro Koizumi is expected to take up the matter when he meets Friday with President Vladimir Putin in Moscow.

Russia already has an agreement with China to construct an oil pipeline from the west Siberian city of Angarsk to the city of Daqing.

The Japanese hope Russia would build a 3,800-km trans-Siberian pipeline that would circumvent Chinese territory, from Angarsk to Nakhodka. Such a project would cost an estimated $5 billion. If the Russians agree, the pipeline would become by far the largest project of economic cooperation between Japan and Russia.

Chief Cabinet Secretary Yasuo Fukuda has said construction of the Angarsk-to-Nakhodka pipeline would constitute a “pillar of Japan-Russia economic cooperation.”

Apart from shipping oil to Japan, the Angarsk-to-Nakhodka route would open up a market for Siberian oil in other parts of Asia as well as the United States.

A Japanese government source said Japan’s proposal was not intended to compete with China, even though experts agree that building two separate pipelines would make no economic sense.

Russia has yet to indicate a clear stance on the Japanese proposal, saying it needs to examine the commercial feasibility of the Angarsk-to-Nakhodka project.

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