Russia dashing American pipe dreams

Russia has embarked on a massive gas transfer project, which threatens the future of the highly sought Asian markets by the US ExxonMobil.

On Friday, Russia's state-owned gas exporter Gazprom launched the project to supply its Pacific Ocean port city of Vladivostok with an eye on complementing gas transit to East Asian countries in the future, Bloomberg reported.

Attending the inauguration ceremony, Prime Minister Vladimir Putin said, “The development of gas transportation infrastructure in the east will let us diversify our exports.”

An annual volume of 150 billion cubic meters of gas is expected to be produced in Vladivostok by 2020 -- the year when the company is set to sell up to 25 billion cubic meters in the Far East.

The fuel, mainly sourced from Sakhalin Island, is to be diffused through the pipeline in 2011, one year before Vladivostok is to witness the summit of the Asia-Pacific Economic Cooperation (APEC) group.

ExxonMobil Corp, the largest of the non state-owned energy companies, stands most to lose from the project if Gazprom chooses to venture into the Chinese markets. Japan has also been tipped as a destination for the gas that travels through the 1,800-kilometer pipeline. More