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. Last Updated: 07/27/2016

Transneft's Pipeline Faces More Scrutiny

Russia's environmental watchdog has thrown another roadblock in the way of an $11 billion oil pipeline meant to feed energy-hungry Asian markets, rejecting Transneft's planned terminating point for the pipeline, a spokesman for the watchdog said Friday.

The Federal Service for Environmental, Technological and Atomic Inspection has rejected the choice of Perevoznaya Bay as the terminus of the planned Eastern Siberia-Pacific Ocean pipeline due to environmental concerns, a service spokesman said by telephone Friday.

The pipeline, designated a priority project by President Vladimir Putin, is key to Russia's plans to expand energy supplies to Asian markets including China, Japan and South Korea.

Pipeline monopoly Transneft has faced fierce opposition by environmentalists and government environmental agencies over the planned construction route, which runs as close as 800 meters to Lake Baikal, the world's largest freshwater lake.

Confirmation of the refusal comes two weeks after the environmental service controversially overturned its own expert commission's decision to reject the first half of the route, which is the part that skirts Lake Baikal.

The watchdog's expert commission voted against the route in January, but then approved it in a revote earlier this month after watchdog head Konstantin Pulikovsky delayed the final decision and added additional members to the commission.

Transneft vice president Sergei Grigoriyev said he was unperturbed by the rejection of Perevoznaya Bay, adding that it would neither delay construction nor affect the cost.

"It's nothing to worry about. We have 2,300 kilometers of the pipeline's first stage to build before we need to know where it ends," Grigoriyev said by telephone Friday.

"Perevoznaya was one of 10 possibilities we chose from. We're in the process of choosing another fairly close by," he said.

Grigoriyev repeated previous assurances that the planned pipeline would involve "such careful safety measures, it's difficult to imagine."

Environmental groups have said an oil terminal at the shallow Perevoznaya Bay would threaten land and sea nature reserves.

A spokesman for Greenpeace Russia, which campaigned along with World Wildlife Fund Russia and other groups against running the pipeline to Perevoznaya, said the environmental watchdog's decision was a victory, but a qualified one.

"The thing that worries us very much -- and not only us -- is that despite the experts' decision about Perevoznaya, they made a far bigger mistake by accepting the first part of the route alongside Baikal," spokesman Yevgeny Usov said by telephone Friday.

Alfa Bank oil and gas analyst Konstantin Batunin agreed that Russia's intention to secure its position as a major world energy supplier far outweighed environmental concerns.

"It's Transneft who decides where the pipeline will go, and any obstacle lying in its way, including expert commissions, will be removed," Batunin said.