MOSCOW - Russia's second largest oil firm YUKOS said on Wednesday it may join top oil firm LUKOIL in building a major export terminal in Murmansk on the Barents Sea, aimed at boosting supplies to the United States. The head of YUKOS, which made Russia's first direct shipment of crude to the United States in June, said LUKOIL's plan could increase supplies across the Atlantic and help ease the crowded Bosphorus straits, currently handling the bulk of Russia's crude exports which are shipped from the Black Sea.
"We have asked our colleagues from LUKOIL to send us a Murmansk route project, which we are currently studying. So far it does not seem an unrealistic project," Mikhail Khodorkovsky, YUKOS's head and its major shareholder, told reporters.
Russia currently exports up to three million barrels per day (bpd) of crude to world markets. Its oil output is booming for the fourth consecutive year and Moscow needs to build new export routes as its own domestic consumption is barely increasing.
Russian oil firms, which traditionally ship their crude to Europe, have said they are ready to supply more crude to the United States but need more deep water ports and new logistics to bypass the crowded Bosphorus and the Danish strait in the north.
The United States has said Russia's booming output could help cushion oil markets against volatile supplies from OPEC producers in the politically turbulent Middle East.
LUKOIL raised the idea of a one million barrels per day (bpd) terminal in Murmansk, formerly a Soviet era military base, during Russia-U.S. summit in May. But analysts questioned the plan saying the outlet would require building a new huge pipeline.
Khodorkovsky's comments give the idea a significant boost since YUKOS is seen by market analysts as one of Russia's most pragmatic and dynamic oil firms.
YUKOS, whose oil output is set to rise 20 percent this year to 1.4 million bpd, plans to build a huge oil pipeline to China by 2005, but Khodorkovsky said the two projects were not rivals.
"The Murmansk idea can partially be an alternative for the Black Sea but is not in any way an alternative to our Chinese project," he said.
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YUKOS and state pipeline monopoly Transneft plan to ship up to 400,000 bpd to China from 2005 and up to 600,000 bpd from 2010. Khodorkovsky said it was time for other Russian oil firms to commit their volumes and funds to the pipeline as after the link was build they would not be allowed to send crude to China.
Khodorkovsky said Russia needed to upgrade existing pipelines and build new smaller export routes while waiting for the completion of major projects.
He said it was important to boost the capacity in the oil port of Primorsk on the Gulf of Finland to 360,000 bpd from current 240,000 bpd by 2003, and finally start first Russian crude deliveries to the Croatian port of Omisalj this year.
This also would help Russian crude to bypass the Black Sea. Another option to do so would be to link Russia's pipelines to the planned BP-led Baku-Ceyhan project, which envisages shipments of one million bpd of Azeri crude to the Mediterranean Turkish coast.
However, Khordorkovsky played down Transneft's idea of building a $5-billion link from Western and Eastern Siberia to the Pacific port of Nakhodka, saying the link would lack crude.
"I'm not sure Russian firms are ready to commit one million bpd of crude for this pipeline, and without those volumes it simply can not be profitable," he said.
/Reuters/
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