The Russian government wants the state-owned oil producer OAO Transneft to build a US$7 billion crude oil pipeline to the Pacific coast so sales can be opened to all buyers, including the United States and Japan.

　　A rival proposal backed by Russia's biggest oil company, OAO Yukos Oil Co, to build a pipeline to China and give it exclusive access to the oil may be abandoned, Russian Energy Minister Igor Yusufov said.

　　Japan's Vice Minister for Economy, Trade and Industry, Seiji Murata, said Japan, which offered to help fund the Pacific pipeline, has not received confirmation from Russia.

　　Yusufov told a Moscow press conference the preference for the Pacific route was based on pure economic terms.

　　China would have equal access to buy oil in the area close to the port of Nakhodka, where the Pacific pipeline would end, he said.

　　The 3,900-kilometer route to Nakhodka is favored by Transneft and OAO Rosneft, Russia's biggest state-owned oil producer, because it would open future oil sales to a wider range of buyers and boost prices.

　　The Pacific route supports Russia's plan to expand its share of the US market, on both the east and west coasts.

　　Sergei Prisyazhniuk, the chief China representative of Yukos, which backed the rival project with PetroChina Co to build a pipeline to Daqing in China, said he hadn't been informed about any decision on the pipeline.

　　Yukos this month said it agreed to more than double by 2006 the amount of crude it sends by rail to PetroChina as the companies await a final decision on the pipeline.

　　Yukos agreed to send 10 million metric tons of crude oil a year, worth about US$2 billion at current prices, to PetroChina by rail by 2006, up from a planned 3.86 million tons this year, Prisyazhniuk said.

　　"The difference between shipping crude oil to China via railroad or pipeline is cost," he said. "Our company has been supporting China's pipeline plan."

　　The route to the Pacific port of Nakhodka would join an existing network at the town of Taishet, northwest of the city of Angarsk, the starting point for earlier proposed southern routes.

　　Transneft, Russia's oil pipeline monopoly, is drafting a new plan for a pipeline to pump Siberian oil to the Pacific coast.

　　Russia, the world's No. 2 oil supplier after Saudi Arabia, has said it expects to increase exports to the Asia-Pacific region so they comprise a third of shipments abroad in 2020, when the country expects to supply as much as 6.2 million barrels a day to world markets.

　　Yusufov said it will take five or six years to complete the pipeline. Until then, companies will have time to tap eastern Siberian fields to fill the link, which may carry about 1 million barrels of oil a day.

　　(Bloomberg News)