"One of the future steps to develop the pipeline system here in the country's northwest could be the construction of a new oil pipeline with a terminal on the Baltic," Vladimir Putin said, adding that pipeline monopoly Transneft had examined six routes before deciding in favor of Ust-Luga, the most environmentally friendly.
"The new oil pipeline must increase oil exports and diversify delivery routes. It will serve to enhance the energy security of our country and of our partners in Europe, and in general will make possible an increase in Russia's economic potential," Putin said.
He also said it would create additional jobs.
The first stage of the Baltic Pipeline System (BPS), with a capacity of 12 million tons of oil annually and designed to transport oil from both Russia's oil-rich regions and Kazakhstan, was commissioned in 2001. Its current capacity is 75 million tons. Transneft has estimated the cost of the construction of its second stage to Ust-Luga at 78 billion rubles ($3.3 billion).
The Russian premier also said Russia has proposed that its foreign partners use the Baltic Pipeline System-2 and that they buy shares in BPS-2's terminal at Ust-Luga.
"Some of our partners from other countries could also use this route and these possibilities to transship oil and oil products," Putin told a meeting on the pipeline's construction.
The BPS-2 project emerged during an oil conflict between Russia and Belarus in January 2007, when Russia did not supply oil to Europe for four days via the Druzhba pipeline after Belarus had refused to let Russian transit oil flows pass without Russia paying a transit duty.