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Russian oil could become "serious alternative" to Persian Gulf: US envoy
January 5, 2003

A major project to build an Arctic export terminal could make Russian oil exports a "serious alternative" to Middle East oil, the US ambassador to Moscow said on Sunday.

"Murmansk is a port that's open 12 months of the year, and the scale of the proposal would enable the port to accommodate supertankers that could reach the United States relatively quickly," Alexander Vershbow was quoted as saying by the Interfax news agency.

"It could become a serious alternative to oil supplies from the Persian Gulf and other parts of the world," he predicted. The United States "is very interested in expanding oil purchases from Russia," he said, adding that if the Arctic export terminal were built, it would lead to "a significant rise in Russian oil exports to the United States at a competitive price."

Four Russian oil majors signed an initial agreement in November to build a 1,500-kilometer (930-mile) pipeline to connect the northwestern port of Murmansk to an existing Russian oil network.

The companies also said they planned to build a deep-water terminal in Russia's main ice-free northern port to accommodate 300,000-tonne oil tankers that would be able to travel as far as the United States.

LUKoil, Yukos, TNK, and Sibneft, representing four of Russia's five top oil producers, said a more formal declaration of intent is set to be signed in April.

The four companies hope that the new route could help them provide the United States with as much as 13 percent of its total oil imports, Osman Salayev, head of a working group on the project.

US imports of Russian oil currently amount to less than one percent of total US crude imports, or nine million bpd.

The deal could provide huge gains for both sides, as the United States seeks to reduce its reliance on Middle East oil, with a possible war in Iraq threatening to further destabilize an already tense region.

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