Vostok Oil Pipeline
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Vostok Oil Pipeline (Russian: Восток Ойл) is a network of proposed oil pipelines in Russia.[1]
Location
The pipelines are proposed to run from several oil fields in the vicinity to a central oil terminal at the Sever Bay seaport (also known as Bay "North" or порт Бухта Север) on the coast of peninsula Taymyr in the Yenisey Bay, Russia.[2][3]
Phase I
Phase I will connect the Vankor cluster oil fields with the Sever Bay seaport, passing through the Payakhskoye cluster.
Phase II
Phase II will include an additional pipeline extending from the Zapadno-Irkinskoye field to the main Phase I segment near the Payakhskoye cluster.
Phase III
Phase III will run from the additionally developed areas within the Payakhskoye cluster to the main Phase I segment.
Project details
- Operator: Vostok Oil LLC[4]
- Owner: Vostok Oil LLC[5]
- Parent company: Rosneft [85%]; Nord Axis [10%]; Vitol [3.75%]; MME [1.25%][6]
- Capacity:
- Phase I: 115 mtpa by 2033[9]
- Length: 1400 kilometers total (approx.)[3]
- Diameter:
- Phase I: 820 mm[10]
- Status: Proposed[11]
- Start year:
- Cost: 85 billion USD (entire project, including associated infrastructure)[7]
- Range of 70–100 billio USD[12]
- Financing: detailed financing information is provided here[7] and discussed below
- Associated infrastructure: Vankor Oil and Gas Complex (Russia)
*Note pipeline ownership and parent company information is presumed to be the same as that of the broader Vostok Oil project.
Background
Vostok Oil project
The pipeline is part of a larger oil development project in the Arctic named Vostok Oil.[1][11] The project may be the world’s current biggest investment project in the oil and gas sector.[13] It is planned to include development of several oil fields in the north of the Krasnoyarsk Territory, construction of 15 new industry towns, three airports, about 800 km -1400 km of new transmission pipelines, 3500 km of new electricity lines and 2000 MW of electric power capacity, production of 50 new ice-class tankers, and construction of a seaport "Sever Bay".[13][8] Construction is currently ongoing of the 1,300 long terminal mooring site that is to provide space for additional goods deliveries.[13] In May 2021, construction materials have been delivered for the construction of the Sever Bay seaport.[2]
The oil pipeline
The pipeline network is intended to transport oil from the oil fields to the Sever Bay seaport, from which the oil will be transported in Russian ice tankers along the Northern Sea Route to European and Asian markets.[7]
The pipelines would connect the existing fields of the Vankor Oil and Gas Complex (Russia) (Ванкорская группа месторождений Роснефти: Ванкорское, Сузунское, Тагульское и Лодочное месторождения); the Payakhskoye cluster (Пайяхская группа месторождений) which is currently in development stage (license areas prepared for development) (JV with BP[14]); the newly discovered Zapadno-Irkinskoye field (Западно-Иркинский участок) in development stage; and the East Taymyr cluster (Восточно-Таймырский кластер) in the exploration phase (E & A license).[7][1] Phases I, II and III may be constructed simultaneously and are only designated here separately to reflect separate routes.[3][14][15]
In November 2023, it was reported that over 200 km (over 25%) of the 770-kilometer oil pipeline from the Vankor Oil and Gas Complex to the Sever Bay seaport (Vankor-Payakha-Sever Bay Oil Pipeline) had been built.[10] Oil production is expected to commence in 2024, with plans to ship 30 million tons of oil from the Vostok Oil by that year. By 2033, the project aims to deliver 115 million tons of oil. The oil will be transported via a 770 km-long pipeline to the Sever Bay seaport and then continue through the Northern Sea Route.[9]
Financing
Financing of the greater Vostok Oil project was expected to come from three sources: (1) cash from sales of shares in the project, (2) tax incentives, and (3) sale of tail assets.[7]
In late 2020, Rosneft sold a 10% stake in the project to Trafigura, valued at €7 billion (about US$8.5 billion) and financed primarily by Russian banks. The overall valuation of Vostok Oil was US$85 billion.[7] Rosneft ultimately intended to attract further investors, including possibly Vitol, Glencore, and Gunvor, while retaining over 50% stake.[7] In October 2021, Rosneft sold 5% of the project's stake to Swiss trading company Vitol (75% of the 5% stake) and Singapore's Mercantile & Maritime Energy Pte Ltd (MME; 25% of the 5% stake).[5]
In May 2022, Trafigura claimed to have frozen its investments in Russia and condemned the war in Ukraine, but it did not intend to pull out of the Vostok Oil project. Nothing had been heard from Vitol or MME.[16]
In June 2022, Trafigura announced its intention to sell its 10% stake in the project.[17] In July 2022, it was announced the stake was sold to Hong Kong-based trader Nord Axis.[18]
Environment and social impacts
There is significant opposition to the project from local environmental groups and indigenous people in the region.[19] The project involves massive development in the area and would threaten fragile Arctic ecosystems (including via oil spills), would increase tanker traffic along the Northern Sea Route, and contribute to global CO2 emissions. The project is expected to create thousands of new jobs; however, these jobs would require highly specialized skills which most people in local communities do not posses; therefore, these jobs are likely to attract and mostly benefit workers from other areas.[19] The project also threatens local finishing communities, their livelihood and traditions.[19]
Articles and resources
References
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 "VOSTOK OIL – A LARGE-SCALE WORLD-CLASS PROJECT". Rosneft. Archived from the original on October 25, 2021. Retrieved Feb 17, 2022.
- ↑ 2.0 2.1 "Here comes Russia's biggest Arctic oil terminal". The Barents Observer. May 26, 2021. Retrieved Feb 17, 2022.
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 "«Роснефть» начала строительство нового нефтеналивного терминала на Таймыре". Sdelanounas.ru. May 27, 2021. Retrieved Feb 17, 2022.
- ↑ "Информация о предприятии". Rosneft. Retrieved January 8, 2024.
{{cite web}}: CS1 maint: url-status (link) - ↑ 5.0 5.1 5.2 "ROSNEFT SELLS 5% IN VOSTOK OIL PROJECT TO VITOL AND SINGAPORE'S MME". Energy Global News. 2021-10-20. Retrieved 2022-06-01.
- ↑ "Trafigura sells stake in Russia's Vostok Oil project to Hong Kong-based trader Nord Axis". Retrieved 2022-08-27.
- ↑ 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 "Роснефть. Часть 3. "Восток Ойл" и всё-всё-всё..." Telegra.ph. Feb 13, 2021. Retrieved Feb 17, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ 8.0 8.1 "Finest drops of Arctic oil on Putin's table". The Barents Observer. Aug 20, 2020. Retrieved Feb 17, 2022.
- ↑ 9.0 9.1 9.2 ""Роснефть" построила четверть нефтепровода для "Восток ойла"". www.korabel.ru. November 7, 2023. Retrieved January 8, 2024.
{{cite web}}: CS1 maint: url-status (link) - ↑ 10.0 10.1 "Роснефть строит "Восток Ойл"". dzen.ru. November 7, 2023. Retrieved January 8, 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ 11.0 11.1 "Russian oil giant announces start of vast Arctic project". Phys.org. Nov 25, 2020. Retrieved Feb 17, 2022.
- ↑ "Rosneft Plans to Sell Some Deposits Amid Costly Vostok Oil Project". Warsaw Institute. 2020-11-30. Retrieved 2022-05-30.
- ↑ 13.0 13.1 13.2 "Russia's biggest oil project rises on coast of Yenisey Bay". The Barents Observer. Nov 19, 2021. Retrieved Feb 17, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ 14.0 14.1 "«Роснефть» оценивает проект «Восток Ойл» в 37 миллиардов баррелей". Bez Formata. Sep 10, 2020. Retrieved Feb 17, 2022.
- ↑ "Pipeline route (proposed)". Bez Formata. Sep 10, 2020. Retrieved Feb 17, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Trafigura Distances Itself From Russia". Energy Intelligence. 2022-03-02. Retrieved 2022-06-01.
- ↑ "Rosneft continues Vostok Arctic oil project after partner quits". Retrieved 2022-06-21.
- ↑ "Trafigura sells stake in Russia's Vostok Oil project to Hong Kong-based trader Nord Axis". Retrieved 2022-08-29.
- ↑ 19.0 19.1 19.2 "Mega oil project in Russia's far north threatens Arctic indigenous communities". Climate Change News. Jun 25, 2021. Retrieved Feb 17, 2022.
