**RUSSIA'SPIPELINE SYSTEM AND OIL AND GAS TRANSPORTATION PROJECTS**

 

SUBJECTCOUNTRY:                       RUSSIA

 

POSTOF ORIGIN:                             MOSCOW

 

SERIES:                                              INDUSTRYSECTOR ANALYSIS (ISA)

 

AUTHOR:                                           NICKMIKHAILOV

 

DATEOF REPORT (YYMM):          01/31/00

 

**SUMMARY**

 

Thismarket research report focuses on the current state of Russia's vast oil andnatural gas pipeline network, along with prospective future needs andpriorities for Russian energy transportation.  Particular attention is given to future projects (as well assome already planned/or begun) in which United States companies in a wide rangeof industries (from civil engineering to pumps, turbines and compressors tostructural diagnostics, environmental protection technologies andtelecommunications) may find commercial opportunities.

 

Asmany of these projects are still at the concept stage, as the range ofindustries and technologies involved is so broad as noted above, and as many ofthe projects are first-time undertakings unprecedented in Russia, this reportdoes not attempt an industry-by-industry market share analysis.  Rather, the focus is on highlightingprojects of greatest potential commercial opportunity during the next decade.

 

Inaddition to new projects, upgrades and modernization of Russia's massiveexisting pipeline infrastructure will be required; and so significant attentionis paid to the state-owned Transneft monopoly which controls the predominantshare of the oil transport system, as well as Gazprom, the Russian natural gasmonopoly.  With their promise ofhard-currency revenues, projects that expand or revitalize export routes are ofparticular interest to potential foreign suppliers or contractors.  Companies will find, however, thatfinancial resource constraints facing Russian companies, along with"buy-Russian" pressures in the market, will confer advantages oncompanies which team up with local Russian firms as partners, except where nodomestic analogues are available for the particular equipment or service inquestion.  End summary.

 

#### A.       RUSSIA'SOIL TRANSPORTATION SYSTEM: 

#### CURRENT STATUS AND FUTUREDEVELOPMENT

 

General Overview

 

Russia's existing nationaloil trunk pipeline network is a unique technological system.  It comprises 46,800 km of trunkpipelines, 395 oil pumping stations, 868 storage facilities with total carryingcapacity amounting to 12.7 million cubic meters.  The average length of transcontinental routes is 3,500 -4,000 km.  The average pipelinediameter of 860 mm, almost twice as large as the international average, resultsin higher maintenance costs per kilometer.  According to long-range development plans (for the period upto 2010), the length of new oil pipelines in Russia may reach 9,000 km.  At the same time, 10,000 km -- over 20percent of the total existing network -- may require refurbishing to one degreeor another.

 

Transneft - the Key Player

 

Transneft is the state-ownedcompany that manages, services and is responsible for developing thesystem.  The company is chargedwith ensuring the transportation of crude oil by appropriate volumes and routesspecified in the transportation (export) schedule produced by the RussianGovernment's Interministerial Commission. The schedule is based on annual transport contracts that producingcompanies draw up with Transneft specifying the amount and quality of crude tobe carried, starting and final points of shipment, route, and terms andschedule of payment.  Quarterly andmonthly allotments and quotas are calculated using the oil companies' certificatesof their own annual production. (Companies dissatisfied with their quotas can apply for additionalincremental shipments on a carrying availability basis.  Producers who find themselves withsurplus capacity can loan, transfer or sell it to whomever they deemappropriate.) 

 

This system and the resultingschedule could well be what Transneft officials cite as their goal -- namely, asystem of transparent and fair access rules -- if it were not for certaingovernment-backed programs and all sorts of side deals.  The mechanism for these sometimes-obscuretransactions involving the Transneft transport network is basically thefollowing.  A designated companypurchases oil at the domestic price, exports it using Transneft capacities,resells it abroad at the world price and shares the profit with the stateaccordingly. 

 

Interest in access to exportpipelines is of such major concern to Russian oil producers because of thedisparity between global and internal Russian market oil prices.  For several reasons, mainly lowerdomestic demand and mandated deliveries to domestic refineries, Russian oilprices remain below global levels, although the gap has closed in the pastdecade.

 

In response to the pressuresto boost export route access, in September 1999, Transneft's Board of Directorsadopted "The Concept for Future Development of Trunk Pipelines inRussia" for the year 2000. The main goal of the program is to create new and further developexisting, economically viable export routes, as well as to attract investmentfor the development of Russia's oil sector to satisfy demands of Russian andforeign oil producers in carrying crude to export markets.  While developing such projectsTransneft is considering the following aspects: 

 

- degree of compatibilitywith existing routes;

- economic feasibility basedon current and future developments with the view to bring additional taxes tofederal and regional budgets;

- ability to attractinvestment for future upstream development in Russia. 

 

Company Profile

 

Transneft is regionally subdivided intoseveral trunkline operating companies:

 

- The Urals-Siberian Trunk PipelineCompany (TPC)- operates 7,809 km of trunklines in Bashkortostan, Tatarstan,Chelyabinsk, Kurgan, North-Kazakhstan, Omsk, Orenburg and Perm region.  It maintains 29 pump stations with 62line pumps and 9 booster pumps, with a workforce of 5,000.

 

- The Middle Volga TPC - takes crude fromKuibyshevneft, Orenburgneft, Saratovneftegaz, Nizhnevolzhskneft producers aswell as from adjacent inter-regional pipelines and operates a total of 5,702 kmof trunklines, including the Kuibyshev-Lisichansk section (1200 mm diameter),the Nizhnevartovsk-Kuibyshev section (1200 mm), the Kuibyshev-Tikhoretsksection (800 mm), and the Guriev-Kuibyshev section (700 mm), as well as 44storage tanks with capacity of 1,930 cubic meters, and 41 pumping stations.

 

- The Upper Volga TPC - supplies crude tofive of Western Russia's most important refineries (Nizhniy Novgorod, Moscow,Kirishi, Yaroslavl and Ryazan) and operates a total of 4,500 km of trunklineswith the project capacity of 210 million tons/year with 39 pumping stations(157 pump units with maximum power up to 5,000 Kw and capacity up to 10,000cubic meters/hour).  The totalstorage capacity of 49 tanks is 840,000 cubic meters.  The company employs 3,000 people.

 

- The North and Northwest Siberian TPC -operates a total of eight trunklines of about 10,000 km (diameters vary from500 to 1220 mm) with total storage capacity of 1.5 million cubic meters and 83pumping stations.

 

- The Northern TPC - operates two trunklines.One is the 406.6 km-long Usa-Ukhta line (diameter 720 mm) with a storagecapacity of 160,000 cubic meters and 4 pumping stations; and the other is the1,138 km-long Ukhta-Yaroslavl trunkline (820 mm) with the total storagecapacity of 240,000 cubic meters and 8 pumping stations. The Northern TPCemploys 1,300.  This segment is thevital link for transport of oil from crude-rich Komi Republic in Russia's FarNorthwest to refineries and markets in more densely populated regions ofRussia.

 

- The Black Sea TPC covers transportationof crude to tank parks for export, and to domestic oil refineries.  It operates 1,030 km of trunklines(with diameters of 300-800 mm) from Tikhoretsk to Novorossiysk and Tuapse,including 3 line and 7 transfer pumping stations. Sheskharis reloading tankpark receives and stores crude and petroleum products for further loading ontankers.  It has a total storagecapacity of 88,000 tons of crude and products, 7 cargo and 1 buffer berths fortankers with tonnage from 15 to 150 thousand tons.  The Zarechiye reloading storage (at Tuapse terminal) hasstorage capacity of 80,000 tons with 2 cargo berths for tankers with tonnagevarying from 30 to 60 thousand tons.

 

- The Caspian-Caucasus TPC is responsiblefor transportation of West Siberian and Tatar oil to export terminals anddomestic refineries. It operates more than 2,000 km of pipelines (withdiameters from 530-1020 mm) and maintains 19 pumping stations with the totalflow capacity of about 50 million tons/year. 

 

Transneft classifies its pipelines into three major groups: Export,interregional, and intraregional. Export pipelines are the most loaded. 1998recorded throughput of export trunklines amounted to 110% of 1997 levels, whileexport to the CIS countries was 106% as compared with 1997; and these exportpipelines were approaching full capacity (the average throughput for exporttrunklines is as high as 101-103% of capacity).  In contrast, the current average load of other (non-export)pipelines operated by Transneft is only about 56% of capacity.

 

Interregional trunk pipelines are vital for domestic market, with theirstrategic importance for rerouting crude flows.  They include Surgut-Polotsk, Kholmogory-Klin, NKK, Ubkua,Omsk - Irkutsk, Ust - Balyk - Omsk, Druzhba-1, Druzhba-2, Samara - Lisitchansk,Samara - Tikhoretsk, and Andzhero-Sudzhensk - Omsk.

 

Intraregional networks are important for local producers andrefineries.  These intraregionalpipelines are concentrated mostly (although not exclusively) in the Volgaregion, within republics such as Bashkortostan and Tatarstan, where large oildeposits have coexisted with fairly large population centers.

 

The low average operational rate of the whole system today is due inpart to the continuing decline of oil production in the traditionaloil-producing regions of Russia. Eventually, export route development will depend on the development ofnew oil fields in the Northern European part of Russia (the Komi Republic andArchangelsk Region), Tyumen Region, and Eastern Siberia.  It will also depend on oil transit fromKazakhstan, Azerbaijan, and Turkmenistan via Russia.  Another key factor affecting the development of new exportroutes is the scarcity of marine terminals in Russia.

 

In 1998 Transneft spent about $250 million commissioning 283 km of newpipelines, including the 161 km-long Ust Balyk - Omsk line, the 35 km-longSamara-Unecha line, and the 20 km-long Usa-Ukhta line.  The 1999 plan added a further 289 km ofnew pipeline construction.

 

European Cooperation

 

Transneft is activelycooperating with international financial institutions including the EuropeanBank for Reconstruction and Development (EBRD) and the World Bank Group's.International Bank for Reconstruction and Development (IBRD) and InternationalFinance Corporation (IFC).  Plansto further cooperate with the European Union have also been announced. Theobjective of such cooperation is to join international and export routes to theEC infrastructure. Transneft is participating in the SINERGI and INOGATEprograms, Baltic Ring and FARE Programs.

 

Transneft Optimization Program

 

Transneft is responsible for the overall maintenance of the system toensure its operation as well as its profitability.  Now, with the current decrease in loading capacity,improving the efficiency of the system and its components is becoming more andmore imperative. 

 

The low carrying efficiency of regional pipelines is difficult toimprove under present conditions. With continuous flow from the oil fields torefineries it's technically not possible to reduce the number of oil pumpingstations;  and in the long run itis not necessarily feasibile to reduce the capacity of such regionalpipelines.  Rather, it is nowgenerally accepted that maintenance and repairs and especially introduction ofadvanced maintenance technologies that permit continuous operation are closelylinked to operational efficiency, cost saving, and environmental safety.  This new approach so far has resultedin the decrease of failures in quite a number of categories, from 0.27 per1,000 km in 1991 to 0.06 per 1,000 km in both 1997 and 1998, the lowestbreakdown rate for the past decade.

 

Transneft is developing both strategic and special programs to maintainits pipelines' current reliability level. The most important is a "Comprehensive Program on Diagnostics,Major Repairs and Reconstruction of Trunk Pipelines".

 

The company's major concerns are concentrated on the performance of itsolder pipelines.  About 50% oftrunklines have been in service for 30 years or longer, often surpassing theirprojected service life of 33 years. Typically, breakdowns occur due to corrosion (both interior andexterior) or wear-out damages normally caused by the absence or inferiorquality of anticorrosion protection, as well as technological, construction orhook-up defects.  Transneftspecialists now view traditional repair, consisting of sectional pipereplacement, as a low- efficiency, high-cost approach.  The company also pays a lot moreattention to organizational (personnel) and technological structureimprovement.  Regional operatingsubsidiaries are also developing plans to harmonize their existing capacitieswith load volumes where possible. Specifically, these plans include selective decommissioning of excessivecapacities. The objective is to cut maintenance costs and to redirectthus-freed financial resources toward further modernization.

 

The program is based on the ratio between the projected system load andrequired system capacity.  Thetotal load for the year 2000 is forecast at 304.5 million tons.  By 2005 it will reach 305.9 milliontons per year.  The 2010 projectionis 310 million tons per year. These estimates do not include the transit of Tengiz oil (up to 15million tons), Timan-Pechora region production (up to 12 million tons), andEastern Siberian projected production of up to 16 million tons per year.

 

Meanwhile, excess capacities exist on trunklines in the following areas:

Siberia - Far East;

Samara and Unecha to the Western border; and

Transit from Western to Eastern Siberia.

 

Production trends and locations of remaining exploitable reservesinvariably point toward a steady decline of oil production in Western Siberia,and consequently toward lower loads for the UBKUA and NKK pipelines.  According to Transneft's optimizationprogram, the capacity of the TON -1 pipeline (Jurgamysh - Subkhankulovo) in theUrals will be decommissioned. Overall decommissioning plans include 4,552 km of trunklines and 430pumping stations, of which 130 pumping stations are scheduled fordecommissioning by the year 2002.

 

Addressing pipeline servicing problems, Transneft has set up a **Center for Technical Diagnostics**, whichis responsible for pipeline exterior and interior monitoring. The currentmaintenance programs rely on control/monitoring systems for pipelines and tanksand include:

 

-       Pipelineleak detection sensor systems;

-       Interiorpipe control systems (intelligent pigs, magniscan and ultrascan);

-       Physicalacoustic equipment;

-       X-ray-basedtechnologies.

 

Pipeline-laying(construction) work as well as defects in hook-up welding considerablydowngrade the overall quality and service life of Russia's pipelines.  Construction and hook-up work accountfor the bulk of defects in circular welds, corrugations, dents andscratches.  About 27,000 defectswere detected along the 1,563 km of trunk pipelines already tested. Thefollowing defects were the most common:

- fusion (unwelded pieces,fracture-type defects) - 73%

- edge displacement - 13%

- inclusions or freckles- 4%

- over-welding  - 1%

- other defects -   9% 

 

Pipeline diagnostic systemsare aimed at monitoring the technical condition of the pipeline system,identifying rates of corrosion, and selecting the most appropriate repairmethod, and technologies that can help improve efficiency in this area are indemand.

 

In total, 5,595 km ofpipelines were examined between 1994-1997, with priority given to exportpipelines.  The results of thisfirst systematic inspection of Russia's 40,000 km+ of oil pipelines show 15%manifesting interior corrosion, with depths ranging from 10-40 %.  Exterior corrosion defects are unevenlydistributed on the total length of the pipeline.  The Irtysh-Torgili section examined in October 1996 andagain in April 1999 showed that the depth of corrosion defects grew from 1.4 mmto 3 mm during two and half years. The estimated corrosion rate is about 0.43 mm per year.  The preliminary forecast is thatcorrosion defects will continue to develop, reaching critical dimensions oncertain sections.  Accidents causedby sub-par longitudinal welding rank first among accidents.  This requires far more intensive use ofinterior pipe monitoring, including intelligent pigs, magniscan and ultrascandevices.

 

This brief overviewillustrates the fact that many parts of the Transneft system have entered intothe stage impending obsolescence. About 50% of pipelines have reached the end of their service life.  The only feasible way to maintain thesystem consists in establishing continuous monitoring systems capable ofdetecting critical segments with their final replacement.  The information obtained from pipelinemonitoring will allow Transneft to draw up optimal repair schedules and cutrepair costs; increase future pipeline reliability and safety; and bettermanage the trunklines' capacities.

 

The Giprotruboprovod Trunkline Design Institute - (GTP)

 

GTP is a Russian designinstitute that ha splayed a key role in major oil transportation projects.  A subsidiary of Transneft, GTP isactively developing the following:

�       Nationaland regional trunklines development programs;

�       Trunklinefeasibility studies;

�       Standarddesigns for trunkline facilities;

�       Technicalnorms and requirements;

�       Technicaldesign norms; and

�       Computerizeddesign systems.

 

The Institute played the keydesign role in developing over 70% of the 65,000 km-long trunk pipeline systemin the former Soviet Union, including the 5,000 km long Druzhba trunkline andthe big 1,020-1,220 mm pipelines in Western Siberia.  Recently it has planned a number of projects including“Routing and Development of Pipeline Transportation to 2005” and “Timan-PechoraFuel and Energy Complex Development,” as well as a pipeline project from theTengiz oil field via Guriev-Astrakhan-Grozny.  Currently GTP is carrying out designs for Trunk PipelinesJSC, another subsidiary of Transneft. This work is connected with refurbishment and repairs of existingDruzhba, Tihoretsk-Novorossiysk, and Baku-Tihoretsk trunklines.  

 

GTP is also engaged indesign work for other non-Transneft pipelines for Russia and the NIS, such asthe Caspian Pipeline Consortium (CPC). The CPC project, with its 750 km long section crossing Russianterritory, is designed to carry oil from Western Kazakhstan's Tengiz oil fieldto a Black Sea marine terminal in Russia. The feasibility study was completedin 1998.  GTP together with U.S.engineering contractor Fluor Daniel continues to carry out the project designwork, and construction for the marine terminal near Novorossiysk began in May1999.  GTP is also eyeing themuch-discussed Baltic Pipeline System. The BPS project envisages potential joint efforts of companies such asTransneft, KomiTEK, Rosneft, Slavneft, Conoco, BG, Elf Neftegas, Neste Oy,Total, and Williams/IPL, with World Bank or other outside financial support. 

 

Currently, WesternKazakhstan's oil is exported northward via Russia, through the Atyrau-Samaratrunkline.  Its capacity is 10.2million tons/year.  GTP isconsidering solutions to increase its capacity by 5 million tons.  GTP is also planning research ontransportation costs on the territory of Russia, Belarus, Poland and Germanyfor additional volumes to Polish and German refineries.  GTP is studying opportunities to usethe port of Gdansk to export Russian oil. Reportedly, Romania has also attracting some attention from Russianproducers, CPC partners and the Azerbaijan International Operational Company,regarding construction of a transit pipeline to Romanian territory.   Finally, GTP has been conductinga feasibility study for transport of oil from Russia to China.  The preliminary results showed hightransportation costs, but the project retains some potential, enough so thatthe studies will continue. 

 

**B.        FUTUREDEVELOPMENT**/ **PROJECTS**

** **

 

StrategicallyTransneft is developing four basic export routes:

�      Southernroute (Black Sea/Caspian);

�      Northern(Baltic Sea);

�      CentralEuropean; and

�      Eastern

 

Major pipeline projects(either planned or actually begun) are as follows:

-       The construction of the Baltic Pipeline System (BPS);

-       Timan-Pechora basin pipeline development;

-       Modernization and expansion of the Druzhba pipeline;

-       The construction of the Burgas - Alexandropoulispipeline;

-       Integration of the Druzhba - Adria pipelines;

-       Yamal - Europe project (investment agreements signedfor $12 billion);

-       The Blue Stream project (gas to Turkey);

-       The expansion of the capacity at Muugu port;

-       The expansion of Novopolotsk - Mazheiku - Butinge linecapacity;

-       The Sukhodolnaya - Rodionovskaya pipeline;

-       The Western pipeline system;

-       The CPC project;

-       Atyrau - Samara pipeline upgrade (with Kazakhstaniparticipation) by 5 million tons/year;

-       Upgrade of Tikhoretsk - Novorossiysk trunkline by 5million tons/year;

-       Sakhalin - Khabarovsk - Vladivostok lines (as part ofan eventyal export trunkline to China, Japan, Korea);

-       A Sakhalin - Hokkaido line; and

-       Pipeline infrastructure development at the Kovyktafield in Eastern Siberia, with a long-term export trunkline to China.

 

**i)  Short-/ Medium-Term Oil PipelineProjects**

 

The above projects can besubdivided into two groups. The first include priority and short-termprojects.  Recently the Russiangovernment made the decision to build two priority pipelines that would bypasssections in the Chechen Republic and in Ukraine.

 

The Chechen Republic bypasspipeline

 

This project has the objectiveof securing safe transportation of about 7 million tons/year of early Azeri oilby adding a section bypassing the politically unstable territory of Chechnya,en route to the Baku - Tikhoretsk trunkline.  The construction has already started and the project is duefor completion by mid 2000.  The$150-180 million bypass pipeline will transport Caspian crude through Dagestanto the port of Novorossiysk. Transneft is planning to finance the bypass construction using its ownresources, with the payback coming from an investment tariff.  Currently, Azeri crude travels fromDagestan to Novorossiysk by rail, a costlier alternative for all but short-termtransit of relatively low volumes.

 

Ukraine bypass pipeline 

 

Thisproject has the objective of bypassing Ukrainian territory by adding a 254km-long Sukhodolnaya - Rodionovskaya section to ensure a cost-effectiveSouthern export route through the Novorossiysk terminal.  The Rostov Regional Administration inRussia, together with Transneft, has developed a commercial proposal for the"Sukhodolnaya - Rodionovo - Nesvetayskaya" pipelineconstruction.  For Russia, theimperative for the project has come from what it alleges are uncompensatedsiphoning of oil (to the tune of as much as $70 million annually) which Russiacurrently exports through Ukrainian lines.  The long-simmering Russia-Ukraine feud on transportationtariffs and oil export duties has showed no signs of abating: As of earlyDecember 1999, Russia doubled the export duties to 15 euros per metric ton,which could provoke Ukrainian authorities to raise transit tariffs.  Regardless of how the present spat issettled, the project's proponents argue that it will cut transportation costsfor Russia by $1.5 per ton to Novorossiysk, avoiding the existing transit costsvia Ukraine.  As of this writing,Ukraine's transit tariff (for the 350 km-long Sukhodolnaya - Lisichansk -Rodionovskaya section) is $2.35 per ton -- almost 5 times higher than theaverage Russian oil transport tariff. Currently the only independent exportroute to Western Europe is through the Tuapse terminal near Novorossiysk (withannual capacity of 7 million tons). All other routes go via CIS countries and the Baltic states.  Russia exported 54% of its crude viasea terminals in 1998.  About 32million tons of this went through Novorossiysk via Ukraine, amounting to 29% ofthe total export and 52% of Russian oil exported through sea terminals. 

 

The estimated project costfor the Ukrainian Bypass segment is $113 million, with estimated completiontime of 1 year.  The investment payback will be accrued through the tariff differential, and will take about 8years.  Potential financing may besecured through the Bouyges Group, a French company that is also participatingin the CPC project.  GTP andChernomortransneft will likely be carrying out the job. The pipeline, withthroughput of 25-40 million tons/year could become operational as soon as 2001.

 

Bypassing Ukraine from the transportation point of view could nevertheless presentsome complications for Russia. Ukraine has indicated that it would be interested in offering servicesand control of its refineries in exchange for guaranteed volumes of crudesupplies to keep these refineries working.  One of the refineries has already been transferred toKazakhstan, while the Linos (Lisichansk) refinery's would-be transfer to Russiawas put on hold specifically due to lack of guaranteed supplies from theRussian side.  A bypass pipeline,while reducing Russia's reliance on higher-cost Ukrainian routes, may notnecessarily end up contributing to improving Russia's overall position inneighboring energy markets, if Russian oil producers were to lose Ukrainiandownstream customers to competing producers from elsewhere in the CIS.   Moreover, after finishing theconstruction of the "Odessa - Brody" pipeline, Ukraine may be able toattract Azeri, Turkmen and probably Kazakhstani oil to bring it to WesternEurope, bypassing Russia.  Thisscenario would affect Russia's ability to deliver crude to West Europeanmarkets and could make it even more dependent on Ukrainian transit through thecost-unfriendly Druzhba pipeline.

 

The Baltic Pipeline System(BPS) and the Northern Gateway

 

Given Russia's transitdependence while exporting to the West, Russian officials view this project ashaving strategic importance for the country, because it will open up a newexport route via the Baltic Sea port of Primorsk.  Practically speaking, however, BPS development will beenormously costly.  As a result, itprobably will have to be made as a joint effort involving oil companies fromRussia (e.g., Rosneft, Slavneft, and Lukoil) and international investors,potentially including one or more of Neste, British Gas, Total Conoco andWilliams, with IBRD, TACIS or other multilateral financial support (note: theabove-named companies are those which are poised to make significantinvestments in Russia's Timan Pechora Basin, whose production will be needed tomake BPS or other routes in Northern Russia economical.  Already, the European Bank forReconstruction and Development has indicated plans to set aside $150 millionand to encourage other banks to put up a similar amount.  Transneft has been assigned the role ofproject's general contractor. At this point, Transneft and its regionalsubsidiaries envision owning 100% of the equity, with plans to retain at least75% and to sell the remaining 25% to Russian and foreign entities.

 

The first $500 million stageof BPS envisages creation of a new, 12 million tons/year export route by upgradingthe existing Kharyaga-Usinsk-Ukhta-Yaroslavl-Kirishi pipeline, laying down anew pipeline from Kirishi to Primorsk, and building up an oil terminal.  The objective of the second stage is toincrease the throughput of the 2,700 km-long route to approximately 40 milliontons/year by adding additional pipe, and to expand the Primorsk terminalloading capacities.

 

An alternative to BPS, theso-called Northern Gateway project favored by some of the above-listed Westernoil companies, would link Timan-Pechora basin fields with a proposed terminalin the Barents Sea, terminating at a deep-water bay (such as Varandey or othersite in the Nenets Autonomous District) where crude could be loaded ontooceangoing tankers. This option may exclude Transneft altogether, but may givepotential investors a higher assurance of predictability in transit fees andexport access.

  

Upgrade of the Atyrau -Samara pipeline 

 

This existing transittrunkline may be upgraded to permit additional crude transportation of 5million tons/year, contributing to a total flow of up to 15 milliontons/year.  The Kazakhstani firmKaztransoil is expected to finance the bulk of the project.  Kaztransoil has ordered a feasibilitystudy to be carried out by Russia's GTP, but no final decision has been madeyet.

 

Upgrade of the Tikhoretsk -Novorossiysk pipeline

 

The Tikhoretsk -Novorossiyskproject encompasses laying down additional 80 km-long loops and upgradingof pumping stations, to help increase the pipeline's capacity by 5 milliontons/year.  This would bring totalcapacity to 37 million tons/year during Phase 1 of the project; 46.5 milliontons/year with Phase 2; and 52 million tons/year with Phase 3.  It is also planned to build a newterminal in Novorossiysk's port.

 

# The Caspian Pipeline Consortium(CPC) Project

 

The overallscope of work for the $2.3 billion CPC project includes planning, design aidengineering, financing, construction, commissioning and start-up, and day today operations of the 1,580 km pipeline transportation system from Tengiz fieldin Western Kazakhstan to Novorossiysk on Russia's Black Sea coast.  The initial design capacity will allowtransport of up to 28.2 million tons/year.  Capacity will then be increased after four consecutiveupgrade stages (as currently proposed) in order to reach the nominal maximumthroughput capacity of 67 million tons/year by 2014.  The first shipment of oil on the CPC route is scheduled formid-year 2001.  Phase 1 of theProject is slated for October 2001 completion and will provide CPC with thecapacity to transport 28.2 million tons of crude per year. 

 

The CPC project includes the followingsignificant components. The Initial Construction Project (ICP) includes thelaying of a 480-km long, 40-inch pipeline from Komsomolskaya to Kropotkin and a258 km-long, 42-inch pipeline from Kropotkin to a new tank farm nearNovorossiysk.  The tank farm willcontain 4 oil storage tanks with the working capacity of 100,000 cubic meterseach.  The new marine terminal nearthe existing port of Novorossiysk is to contain two Single Point Moorings(SPMs), with loading capacity of 12,700 cubic meters per hour.  There will also be added a facility forsmaller auxiliary vessels to support tanker operations on the Black Sea.  New pumping stations and maintenancefacilities will be built in Kropotkin, Komsomolskaya and Atyrau.  In addition, the existing 753 km-longpipeline from Tengiz to Komsomolskaya will undergo testing, inspection,internal diagnostics and refurbishing. The existing Astrakhan and Tengiz pumping stations will beupgraded.  Finally, a newfiberoptic communication system and SCADA will be installed.

 

The constructionwork on the CPC project is divided into 5 major phases:

�       Refurbishment of existing pipeline andpumping station and construction of a new pumping station in Kazakhstan;

�       Construction of a new pipeline andrefurbishment and expansion of the existing  pipeline in Russia;

�       Construction of two new pumping stationsand refurbishment of existing pumping station in Russia;

�       Construction of marine terminal, tankfarm and offshore facilities; and

�       Setting up a supervisory control and dataacquisition system (SCADA) for the entire system.

In March 1999, CPC signed acontract with the Russian/French Joint Venture "Starstroy" to buildthe marine terminal.  Theconsortium includes Bouyges Offshore and Spie Capag (France),Kubanneftegasstroi (Krasnodar, Russia), and Stavropoltruboprovodstroi(Stavropol, Russia).  The Starstroyconsortium will employ several leading Russian design institutes and constructioncompanies.  At the same time CPCselected Single Buoy Moorings, Inc. (SBM) of Switzerland to supply the singlepoint moorings for the marine terminal. Also in March 1999, CPC contracted with Chicago Bridge & Iron andKoksokhimmontazh (Russia) to build four oil storage tanks at the newterminal.  In April 1999, CPCsigned a contract with Starstroy for the construction of the new pipeline inRussia.  The consortium will employnumerous Russian subcontractors. In May 1999, CPC held groundbreaking ceremonies at the new marineterminal tank farm site to mark the start of construction, and also contractedwith Siemens to install fiber optic communication facilities, which will be thebackbone of the CPC telecom system. In August 1999, CPC contracted FAB GMbH to make new horizontaldirectionally-drilled river crossings. The development and installation of the CPC SCADA system will bepeRussiaormed by a U.S. firm, Valmet.

 

**ii)  Long-Term Oil Pipeline Projects**

 

Diversification of CentralEuropean Russia's Oil Export Options

 

Russian plannersenvision two components: the so-called Northern and Southern routes.  The development of the Northern routeenvisages an increase of crude supply to Polish and German refineries on onehand, and Russian and Kazakhstani oil supply to the Northern European marketvia Gdansk, on the other.  Afeasibility study done jointly by GTP and Texaco has argued for the technicalviability of the Samara-Gdansk trunkline upgrade. 

 

The developmentof the Southern route includes linking the Druzhba and Adria trunklines toincrease delivery of Russian and Caspian crude to refineries in the Balkans andthe Mediterranean via the Omisalj terminal.  The consortium created for this project groups companiesfrom Russia, Belarus, Ukraine, Hungary, Slovakia, and Croatia.  GTP, together with other transportationcompanies, is evaluating tariff policy for the route. 

 

An Oil ExportRoute to China?

 

As a result ofmajor Russian oil company Yukos' recent negotiations on crude supplies toChina, the question of an export pipeline linking East Siberian fields withChinese refineries has been raised. A $ 1.7 billion Angarsk - Ulan Bator - Beijing pipeline project withmaximum throughput of 30 million tons/year, has been discussed.  Reportedly, Sinopec and the Chinese Oiland Gas Corporation as well as the Chinese government are encouraging theproject. 

 

The developmentof this project involves additional exploration and field development inEastern Siberia and the Far East, including vast and expensive infrastructure.  Phase one most probably will involvererouting of some West Siberian crude in an easterly direction with consequentexploration and joint development of East Siberian fields.  A basic agreement has been signedbetween Yukos, Transneft and the Chinese National Oil and Gas Corporation toprepare a feasibility study for the pipeline.

 

LatvianExport Corridor

** **

There areseveral proposals to link and expand pipeline systems of the NIS countries tosupply oil to Northwestern Europe. The World Bank views the Latvian oil transit corridor via Ventspils asthe most economically feasible.

 

The Latvian oiltransit corridor is a multimodular transportation system.  It includes a pipeline system, railroadaccess, oil terminals, and the Ventspils marine terminals, capable of servicingtankers of up to 120,000 tons. Ventspils is probably the best transshipment center for the Baltic areadue to its geographic location and modern technological capacities.  Transit through this ice-free port isalso one of the shortest routes to Western markets.  Ventspils' terminals now allow transshipment of up to 55million tons of oil and petroleum products annually.

 

Currently one ofthe major constraints for Russian crude delivery via Ventspils remains theexisting pipeline's low capacity. The construction of a new pipeline is generally viewed as a bettersolution compared to plans to upgrade the existing segment.  The Polotsk-Ventspils route may be themost viable so far.

 

**C.       DIVERSIFICATIONOF NATURAL GAS EXPORT ROUTES**

 

1999 estimateswere that Russia's total natural gas exports would grow by 4%, reaching about126 billion cubic meters (BCM) for the year.  Year 2000 estimates foresee an additional 4 BCM increase.  By then, an expected price increase ofup to $80 per 1,000 cubic meters will bring Gazprom record revenues of $9.2billion.

 

Gazprom issteadily raising its gas supplies to Europe, its most lucrative market.  Current consumption levels in Europe ofapproximately 340 BCM per year are projected to increase to 410-450 BCMannually in the next ten years. The share of Russian gas is estimated at 25% ofthe total gas consumption in the European market.

 

However,European consumers are not planning to sign additional contracts in the nearestfuture.  Moreover, it is becomingmore and more evident that in the long run other markets will attract Gazprom'sattention.  Shipments to the Balkancountries as well as to Greece and Turkey are expected to grow from about 22BCM in 1998 to an estimate 58 BCM by 2010. (For reference, Russia's totalproven reserves currently amount to 32.3 trillion cubic meters). 

 

At the same timethe share of natural gas from distant and difficult-to-access fields will grow,putting upward pressure on production costs.  Recent low prices ($60 per 1,000 cubic meters) of gas inEurope have reduced Russia's gas export revenues by 6%, although the volumes ofexport to Western and Central Europe has grown somewhat.  And in 1998, for the first time,Gazprom's peRussiaormance showed a negative balance.  The company was forced to cut its overall investment programby 60% and to concentrate on the most important projects.

 

During the lastfew years Gazprom experienced difficulties exporting gas during the winterseason.  Recent irregularities ingas supply to Turkey again led Gazprom blame Ukraine for lack of reliability inits transit responsibilities and continuous unauthorized siphoning of gas bythe Ukrainian consumers.  Almost90% of Russia's gas exports now transit Ukraine.

Therefore, aswith crude exports, Russia is looking for opportunities to bypass Ukraine inorder to reduce losses.  TheYamal-Europe project poses an important alternative route to Germany andAustria via Belarus and Poland.  Afew months ago the first trunkline was commissioned.  The Yamal system ultimately will have a capacity of 60 BCMper year and will cost at least $30 billion.  Commissioning of the second trunkline of the Yamal-WesternEurope export route via Belarus and Poland, an underwater crossing of theBaltic Sea, as well as the Blue Stream project crossing the Black Sea, couldleave Ukraine transit responsible for only 30% of Russia's export flow.  

 

AlternativeRoutes to the Balkans and Turkey

 

In December 1997in accordance with an accord between Russia and Turkey, Gazprom and Botassigned an agreement for Russian gas supplies.  The agreement projects supply of up to 30 BCM annually by2010.  Gas is to be supplied by tworoutes:  Via extending of theexisting gas pipeline network in Ukraine, Rumania and Bulgaria; and via the new"Blue Stream" Black Sea undersea crossing.

 

The"Blue Stream" Project

 

By 2010,"Blue Stream" is envisioned as the conduit for 16 BCM of gas supplyannually to Turkey.  It willprovide direct access to the Turkish market, avoiding transit via third countries.In the long run there may appear opportunities for extension to access MiddleEastern countries. The 600 mm pipe, with wall thickness of 35 mm and workingpressure of 22-25 Mpa, will be laid at a depth of 2,000 meters and pump gaswithout intermediate compressor stations. Poland's Petergas drew thefeasibility study together with design and engineering companies from Russiaand elsewhere in Europe.  Theconstruction of the subsea gas pipeline and Beregovaya compressor station inRussia will be accomplished in cooperation with Italy's ENI.  Construction is slated to take placeduring 2000-2005.  Gazprom isactively pursuing this and other major projects, having already successfullylobbied the Russian Parliament for tax breaks for Blue Stream. 

 

Diversificationof the Northern European Route

** **

This projectenvisages an additional gas supply route to Northern Germany via Finland andfurther through the Baltic Sea reaching Greifswald, Germany.  For this purpose, Nord Transgascompany, set up by Gazprom and Finnish company Neste Oy, has completed afeasibility study.  The projectproposes to supply an estimated 45 BCM of gas to the Nordic and Europeanmarkets by the year 2005.

 

Far East GasSystem Development

 

Despite of theextensive energy resources in the Russia's Far East, the region has always beenand still is dependent on gas supplies from Eastern and Western Siberia.  Consequent high transportation costshave a negative impact on local electricity production and affect a range ofend-users from industrial to residential. With this in mind, the Russian Government is currently studying plans tocreate an overall gas supply system in the Far East. These plans may startmaterializing as early as 2000. The key role in such a development will mostlikely lie with Rosneft.  For thispurpose, Dalneftegaz Joint Stock Company has been set up.  Its major shareholder (51%) is Rosneft(through its subsidiary, Sakhalinmorneftegaz), while the rest will be equallyshared by Rosgazifikatsiya (a pipeline construction subcontractor) as well asthe Sakhalin, Khabarovsk and Primorsky Krai Administrations. 

 

Although oil andgas development in Sakhalin first began in the late 1940s, the region could notattract necessary investments until relatively recently, when internationalconsortia got involved.  Japanesecompanies began work under the Sakhalin-1 consortium as far back as the1970s.  Western partners'perceptions of an inadequate legal framework for such multi-billion dollarinvestments have delayed implementation, however, and only the Sakhalin-2project has begun commercial operations (with fist oil production realized inJuly 1999), with several other projects still at the exploratory stage.  Rosneft, as a participant in almost allof the Sakhalin offshore development projects, still needs to bolster itsfinancial credibility (the Russian Government has suspended its privatizationplans for the company, postponing the planned sell-off of a 25% Rosneft's stockoriginally scheduled for 1998 in the face of lack of interest among prospectivebidders).  This perception offinancial weakness creates additional problems for the company in attractinginvestment, and for financing its share in the Sakhalin projects, especiallySakhalin-1.  Rosneft, however, isnevertheless planning its first $10 million exploratory drilling within theframework of the Rosneft/ARCO Sakhalin-4 project (Astrakhanovsky block) in July2000.  It has also secured SakhalinOblast Governor Farkhutdinov's support for the inclusion of Sakhalin-3 (Ayashskyand East Odoptu blocks) and Sakhalin-5 onto draft Duma lists for eligibilityfor development under Production Sharing Agreement terms.  These projects, in which Rosneft holds33.3% and 51% stakes, are to be developed jointly with Exxon and BP Amoco, respectively.

 

Dalneftegaz iscurrently finalizing the feasibility study for the project.  It will undertake to assure thedelivery of 7 BCM of gas to Primorsky Krai (the Russian Far East's mostpopulous region, including the port of Vladivostok), the same amount toKhabarovsk, and 5 BCM to Sakhalin. The gas supplies will come from theSakhalin-1, 2 and 3 as well as from Anivskoye field being developed by SakhalinOil Company.  Two importanttrunklines will be laid to accomplish this: a 1,000 km-long line to connectSakhalin Island with the Russian mainland, and a 700 km-long line across theisland itself, plus access lines which finally will envisage some sort ofsharing of the resulting gas transport infrastructure.

 

Looking beyondsupply of gas to Russia's eastern regions, Sakhalin pipeline development isalso important from an export standpoint, and may be followed by prospectivepipeline projects linking the Sakhalin shelf with Japan (through Hokkaido),China and Korea.  Plans to deliverSakhalin gas to China's Guangdong province are taking root.  The LNG plant to be built inPrigorodnoye under auspices of the Sakhalin-2 project may be able to startdeliveries in 2001 or 2002 at a rate of 4 million tons per year, with prospectsto double this rate by 2003.  InterestedChinese players have reportedly made up their minds to start building an importterminal for the LNG supplies this year.

 

The EastSiberian Kovykta gas project development led by BP Amoco is also targetingChina's gas market.  It is unclear,however, whether the proven Kovykta resources will be sufficient to provide theflow of about 25 BCM needed to make a $2 billion-plus, 5,000 km gas trunklineto Central China economically viable. The Russian bureaucracy is closely eyeing the project, with the Dumahaving labeled it as "strategic," and having urged Gazprom to assumea key role in it.  Further to thesouth, Asian markets also emerge as a long-term opportunity for futuredevelopment.  Furthest out of suchproposals are gas pipeline across Central Asia and Afghanistan to Pakistan andIndia. 

 

 

**D.        CONTACTS**

 

Forcontacts and further information, please contact the U.S. Department ofCommerce and/or the U.S. & Foreign Commercial Service in Russia:

 

**U.S. & ForeignCommercial Service, U.S. Embassy, Moscow**

23/38Bolshaya. Molchanovka St., Bldg. 2, 121019 Moscow, Russia

### Tel. 7-095-737-5030, Fax: 7-095-737-5033

### E-mail: [email protected]

Contacts:Matthew Edwards, Commercial Officer

NickMikhailov, Commercial Specialist

 

**U.S. & Foreign CommercialService, U.S. Consulate, St. Petersburg**

NevskyProspekt 25, Office 318B, 191186 St. Petersburg, Russia

Tel.7-812-326-2560, Fax: 7-812-326-2561

E-mail:[email protected]

Contacts:Michael Richardson, Principal Commercial Officer

AlexanderKansky, Commercial Specialist

 

**U.S. & ForeignCommercial Service, U.S. Consulate, Vladivostok**

32Pushkinskaya St., 690001 Vladivostok, Russia

Tel.7-4232-30-0093, Fax: 7-4232-30-0092

E-mail:[email protected]

Contacts:Richard Steffens, Principal Commercial Officer

YanaTselikova, Commercial Assistant

 

**U.S. & ForeignCommercial Service, U.S. Consulate, Yekaterinburg**

15Gogolia St., 626450 Yekaterinburg, Russia

Tel.7-3432-56-4691/4619/4513, Fax: 7-3432-56-4515

E-mail:[email protected]

Contacts:Alexander Deyanov, Commercial Specialist

 

**BISNIS**

**(Business InformationService for the New Independent States)**

(BISNIS’website contains a wealth of information and contacts useful for companiespursuing business in Russia and other countries of the former Soviet Union). 

U.S.Department of Commerce, Room 7413

14thStreet at Constitution Avenue, N.W., Washington, D.C.  20230

Tel.1-202-482-4655

Fax:1-202-482-2293

E-mail:[email protected]

BISNISFax Retrieval System:

1-800-USA-TRADE

Internet:www.mac.doc.gov/BISNIS

** **

**American Chamber ofCommerce in Russia (AmCham)**

(Amchamis the private-sector association of United States companies present inRussia.  In 1998, Amcham opened achapter in St. Petersburg, in addition to its Moscow).

ScottM. Blacklin, President

KosmodamianskayaNab. 52, Building 1, 8th floor, Moscow 

Tel.7-095-961-2141

Fax:7-095-961-2142

 

**Energy Transportation Companies andContractors****:  **Note-- the following Russian and foreign companies have been active in oil or gastransportation projects in Russia in recent years. This is not an exhaustivelist of such companies; nor does a company's appearance on this list constitutean endorsement by the U.S. government. However, these companies may be helpful as contacts to other U.S. firmsseeking partnering opportunities in search of business in this sector inRussia.

 

**Transneft**

57 BolshayaPolyanka, Moscow 109180, RUSSIA                                                       

Tel: (7-095)239-8652/8244/953-8710

Fax: (7-095)953-5525

SemionVainshtok, President

 

**Russian Joint Stock Company (RAO) Gazprom**

Namiotkina 16 A,Moscow 117884, RUSSIA

Tel. (7-095)719-8281/719-2941

Fax: (7-095)719-4323

--transportation of gas and condensates; 

-- undergroundstorage of gas;

-- supervisionand operation of the gas trunkline network 

-- export ofgas;

 

--**Gazprom /** Department of GasTransportation, Gas Condensate and Underground Gas Storage

BogdanBudzuliak, Director

Tel: 719-8130

 

--**Gazprom /** Department of FutureDevelopment

VladimirRezunenko, Director 

Tel:719-8018/2241/8030/2914

 

--**Gazprom /** Department of MajorConstruction and Investment

Yuri Goryainov,Director

Tel: 125-4191

 

--**Gazprom /** Department of sale of liquidhydrocarbons and other products

Vasily Fadeyev,Director 

Tel: 719-2731

 

**Giprotruboprovod**

Dobrolyubova16-4, Moscow 127254, RUSSIA

Tel. (7-095)289-9132/289-7582/174-2516

Fax: (7-095)219-8279

E-mail: [email protected]

VladimirKurochkin, General Director

Gerasim Vdovin,First Deputy General Director/Chief Engineer

(overall design/engineeringof trunk pipelines and facilities)

** **

**Bechtel**

(Engineering& construction company)

52Kosmodamianskaya Nab., Bld.3

113054 Moscow,RUSSIA

Phone: (7-095)961-3020

Fax: (7-095)961-3015

Mr. CarolAnderson, General Manager

[email protected]

 

**Fluor Daniel Eurasia, Inc.**

(Projectmanagement, engineering and construction service company)

Leninsky Pr.113/1, office E103, Moscow, RUSSIA

IllarionKiseliov, Head of Representation

[email protected]

Phone: (7-095)956-5165

Fax: (7-095)956-5166

 

**Gaspex S.A.**

(engineering andconstruction of gas pipelines)

Tel/Fax: (7-095)974-8090 (Moscow)

(3632) 518506(Ashgabat)

(371) 245-6247(Tashkent)

Asam Aslanov,President

 

**Sviaztransneft**

(telecommunicationsfor pipeline networks)

6 LyublinskayaStr., Moscow 109390, RUSSIA

Tel: (7-095)178-0017

Fax: (7-095)179-6318

AftandilMamedkhanov, General Director

 

**Caspian Pipeline Consortium**

2 Berezhkovskaya Nab., Moscow 121059, RUSSIA

Tel. (7-095) 745-8770

Fax: (7-095) 745-8772

Victor Fedotov, General Director

Frederick D. Nelson, Deputy GeneralDirector, Projects

 

**ITERA**

(transportationand sales of natural gas)

Tel. (7-095)258-4377/78

Fax: (7-095)258-4365/67

E-mail: [email protected]

Internet: www.iteragroup.com

 

**RussianPipe Manufacturers****:**

** **

**PervouralskiyNovotrubniy Plant**

Ul. Torgovaya, 1

623112 Pervouralsk

Sverdlovskaya oblast, RUSSIA

Tel: (7-34392) 75656

Fax: (7-34392)24478

Arkadiy Shmeliov, General Director

 

**SeverskiyPipe Plant**

Ul. Proletarskaya, 7

624090 Polevskoy

Sverdlovskaya oblast, RUSSIA

Tel: (7-34350) 3-21-01, 3-21-00

Fax: (7-34350) 3-41-97

Aleksey Degay, General Director

** **

**Sinarsky Pipe Plant**

1 Zavodskoy Pr.,Kamensk-Uralsky 

Sverdlovskayaoblast 623401, RUSSIA

Tel: (7-34378) 63030/63252/63403

Fax: (7-34378) 30283

Anatoly Brizhan,General Director

** **

**Chelyabinsky Pipe Plant**

27Mashinostroiteley Str., Cheliabinsk 454129, RUSSIA

Tel. (7-3512)557131/533464/530420

Fax: (7-3512)534418

AlexanderFiodorov, General Director

** **

**Volzhsky Pipe Plant**

Volzhsky,Volgograd Region 404119, RUSSIA

Tel. (7-8443)222171

Fax: (7-8443)256902/257642

Vitaly V.Sadykov,  General Director

** **

**Vyksunsky Metallurgical Works**

Lenina 1,Vyksa,  Nizhegorodskaya Oblast607030, RUSSIA

Tel. (7-83177)93447/93085

Fax: (7-83177)37605/35961

Anatoly M.Sedykh,  Acting General Director

 

**Novolipetsky Metallurgical Works (Lipetsk)**

Tel. (7-0742) 444006/444570

Fax: (7-0742) 432541

Ivan Frantseniuk, General Director

 

**Taganrogsky Metallurgical Works**

1 Zavodskaya, Taganrog, Rostovskaya Oblast 347928,RUSSIA

Tel. (7-86344) 50304/50348

Fax: (7-86344) 24305

Vladimir Shanilov, General Director

 

**Industry Media and Information Resources****:**

 

**Petroleum Argus - FSU Energy**

20, PechatnikovPereulok

129110, Moscow,RUSSIA 

Tel. (7-095)232-1361

Fax: (7-095)956-2611

(weeklyEnglish-language newsletter covering the Russian and CIS petroleum industries)

 

**Russian Petroleum Investor**

Published byWorldTrade Executive, Inc.

PO Box 761,Concord, MA 017442

Tel.978-287-0301

Fax: 978-287-0302

E-mail: [email protected]

Internet: www.wtexec.com

(monthlyEnglish-language analytical journal covering the petroleum industry in the NISregion)

 

**INFO-TEK**

7 KitaigorodskyPr., 103074 Moscow, RUSSIA

Natalia Shuliar,General Director

Tel. (7-095)929-1579/755-4790

Fax: (7-095)220-5495

(monthlyRussian-language journal covering petroleum industries in Russia and the CIS)

 

**InterFax Russia Oil and Gas Report**

2, FirstTverskaya-Yamskaya Str.,

103006 Moscow,RUSSIA 

Tel. (7-095)250-9285

Fax: (7-095)250-8994

(weeklynewsletter covering the Russian and CIS petroleum industries, in English orRussian)

 

**The Adam Smith Institute**

BusinessSeminars International

Sussex House,High Street, Battle

East Sussex,TN33 OAL

Tel.44-171-490-3774

Fax:44-1424-773334

(Organizesfrequent business conferences on the Russian and CIS petroleum industries)

 

**Oil & Gas Industry Trade Exhibitionsin Russia****:**

 

**Neftegaz-2000**

8thInternational Exhibition

June 19-23,2000, Moscow

Organizer:Expocenter/Messe Dusseldorf Russia

 

**Moscow International Oil & gasExhibition (MIOGE) 2001**

May 2001, Moscow

Organizer:ITE/Expocenter (see contact information below)

 

**CIS Offshore**

8thInternational Show

Production,processing and transportation of oil and gas

July, 2001, St.Petersburg

Organizer:Restec (see contact information below)

 

**Exhibition Organizers’ ContactInformation****:**

 

**Expocenter/Mezhvystavka JSC**

Tel. (7-095)255-3739/33

Fax: (7-095)205-6055

Internet:www.expocentr.ru

E-mail:[email protected]

 

**International Trade & ExhibitionsGroup (ITE) PLC**

Tel. +44(0)171-286-9720

Fax: +44(0)171-286-0177

Internet:www.ite-exhibitions.com

E-mail:[email protected]

 

**Restec Exhibition Company**

Tel. (7-812)112-1049

Fax: (7-812)112-2348

Internet:www.restec.ru

E-mail: [email protected]

 

**INDUSTRY SECTOR ANALYSIS (ISA) CUSTOMERSATISFACTION SURVEY**

 

U.S. Departmentof Commerce 

InternationalTrade Administration

The CommercialService

 

The U.S.Department of Commerce would appreciate input from U.S. businesses that haveused this ISA report in conducting export market research.  Please take a few moments to completethe attached survey and fax it to 202/482-0973, or mail it to QAS, Rm. 2002,U.S. Department of Commerce, Washington, D.C. 20230.

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FORM ITA 4130P-I(rev. 5/95)                         OMB. No. 0625-0217; Expires 12/31/96