The East Siberia-Pacific Ocean pipeline is slated to pump up to 1.6 million barrels per day of crude from Siberia to Russia's Far East, which will then be sent on to China and the Asia-Pacific Region.
"Unfortunately, we already see that $400 million will not suffice," Transneft President Semyon Vainshtok told a news conference.
He said that building a terminal at Kozmino Bay, where the pipeline will end on the Pacific, will cost $420-500 million.
Vainshtok added that Russian companies will build the terminal, because the U.S. and Norwegian companies initially considered as contractors for the job "have failed to confirm their readiness to implement the project."
Marat Saifutdinov, vice president of the state pipeline monopoly, said 870 kilometers (540 miles), or almost one-third of the first stage of the project, has already been built.
The Kozmino terminal on the Pacific Coast and the segment linking Taishet in the Eastern Siberian Irkutsk Region with Skovorodino in the Amur Region, with annual throughput capacity of 220.5 million barrels, constitute the first stage of the project. It is expected to be completed in late 2008.
The entire project's cost was initially estimated at $11.5 billion, but needs to be revised as the pipeline's first stage was rerouted for ecological reasons about 400 kilometers (250 miles) away from Lake Baikal, the world's largest freshwater body, and divided into three segments following a series of discussions and a presidential order.
The second stage will involve the construction of a Skovorodino-Kozmino pipeline, to pump 367.5 million barrels per year, and an increase in the Taishet-Skovorodino pipeline's capacity to 588 million barrels.
Sergei Grigoryev, another Transneft vice president, said earlier in the month that the starting date for the construction of the second stage, with the deadline originally fixed for March 2008, will depend on the filling of the first leg and on the development of East Siberia's mineral base.
Vainshtok also called for reducing Russian crude exports and developing its own refining capacities.
"We believe Russian exports of crude oil are unjustifiably high and we insist on curtailing the exports by large volumes," he said.
He said Russia was on sufficiently firm ground to supply products and not raw materials for refining.
"We should develop our own highly effective oil refining and petrochemical sectors," Vainshtok said.
