• Kyodo

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Russia is considering giving priority to a new route for the Siberian oil pipeline that would be favorable to Japan, informed sources said Sunday.

Japan and China have submitted proposals for two competing routes for the pipeline. If the new route, drawn up by a Russian state-run corporation, is adopted, it would be a big step forward toward realization of the $10 billion project.

The Russian administration is more inclined toward the Japanese route in the hope of winning large investments from Japan as well as the expansion of the Asian market, the sources said.

Meanwhile, China is increasing pressure on Russia through its weapons industry, with which China has close ties, according to the sources.

“Difficulties can still be expected,” a Japanese government source said.

The new route being considered moves the starting point to Taishet, about 500 km northeast of Angarsk, which was originally proposed by both Japan and China. The new plan also resolves concerns that leaked oil might pollute Lake Baikal. The route is 100 km further away from the lake than in the initial proposal. As for oil supply to China, the plan suggests expanding delivery by railway to compensate for the new route.

Russian Railways, under the instructions of President Vladimir Putin, expects to be able to increase annual oil transport capacity to China from the current 2.5 million tons to 10 million to 15 million tons in several years.

But this would still be less than the 30 million tons that the Chinese proposed pipeline is expected to carry, and Moscow is considering providing China with technology in space development and weapons production in exchange, the sources said.

The competition between Japan and China surfaced in May 2003 when Russia’s oil giant Yukos signed a 25-year deal with China National Petroleum Corp. to supply oil through a 2,400-km pipeline from the eastern Siberian city of Angarsk to Daqing, China, starting in 2005.

Japan took steps to roll this back a month later, by sending former Prime Minister Yoshiro Mori, Foreign Minister Yoriko Kawaguchi and other officials to Russia to urge Moscow to cooperate with Japan in building a 3,700-km pipeline from Angarsk to Nakhodka.

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