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President of Transneft Semyon Vainshtok: Allow me to inform you how the order you gave in Tomsk is being implemented and what the situation is concerning the construction of the oil pipeline.

On 28 April we started building from Taishet and in two weeks we will start from Skovorodino so the final phase will begin soon. Today we have the first approximation of the final route. We had very little time to prepare and therefore talking about the final route is difficult today especially since we still have more than two possible routes. As of 28 May we will be fully staffed, that is 900 prospectors in 92 brigades, who will go and work on the pipeline. In about four months we will be able to make the final decision on the route. These are very tight deadlines, but there is no doubt that we shall keep to them.

We resolved the issue of financing; 160 kilometres of pipes have already been delivered to the location. We created two companies for this purpose – one to manage the Eastern Siberia – Pacific Ocean project and, second, a project similar to that of the Baltic pipeline. I am sorry, but I don’t see any justification for doubts that the Baikal will not be circumvented.

Vladimir Putin: Go around it?

Semyon Vainshtok: No, we will not go around Lake Baikal. We are proposing that at its closest point the pipeline will be 400 km away from Lake Baikal. Unfortunately the decision that was proposed in Tomsk, to move the pipeline by 40 km, is not possible to implement. We have to go more than 400 km and go around mountains because it is not possible to build there.

Vladimir Putin: What about Lake Baikal’s ecosystem?

Semyon Vainshtok: Surely, we are moving out of the catchment area. So that even if we wanted to we wouldn’t be able to do anything bad. And this holds despite that fact that we are increasing the route by 400 km. We have to build more than 300 km of roads, electrical lines, and organize the electricity supply and I think that we shall still stay within the deadlines we set down.

Vladimir Putin: If I understood you correctly the first thing is that you are working out the roundabout route?

Semyon Vainshtok: That’s right.

Vladimir Putin: That’s the first thing. And the second is that the pipeline system will be at least 400 km away from the Baikal and beyond its catchment area. And the last thing is that in practice work on the pipeline has already begun. You will determine the final route a little bit later, but in any case it will be outside of the catchment area?

Semyon Vainshtok: Absolutely. The way it will be laid out in practice remains open and of course we shall choose the best route. Here is its route on the map, the old route, and here is the new route, and here are the mountains.

Vladimir Putin: If I understand correctly then in addition to all this – and I already talked to some oilmen about this – your pipeline is closer to the Talakan oil field?

Semyon Vainshtok: That’s right, we will be about 40 km away from Talakan.

Vladimir Putin: And so it turns out that the route will be more expensive for you but it will be cheaper for them because they need to build less of their own pipelines and that means that they can lower rates a little bit.

Semyon Vainshtok: That’s right. It’s true that they would have had to build more than 700 km of pipeline and now they only have to build 40. We talked about this issue with the oilmen. Just last week I met with the President of Surguntneftegaz and the President of Rosneft and we are discussing the route. The oilmen even suggested making a compromise – covering some expenses with their own funds, prospecting on their own account and so on. So that we will come even closer to their oil field, they will provide us with electric power. It is in these circumstances that we are working out a compromise.

Vladimir Putin: In summary, the decision we found helps us resolve our environmental problems, but from an economic point of view it is not a bad decision and even creates preferential conditions for our oil companies.

Semyon Vainshtok: Absolutely.

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