RUSSIA - Jan. 3 - New Baltic Terminal Opened.

Pres. Putin visits the opening ceremony of the new oil terminal at Primorsk, 160 km north-west of St. Petersburg, which was built to provide an outlet for oil pumped by pipeline from fields in the vast Timan Pechora basin in the far north. The pipeline carrying oil to Primorsk covers 1,300 miles and, together with the port terminal, costs $600m. Both will be operated by Transneft. The pipeline company paid most of the cost, with help from an export tariff imposed on oil companies. Eventually, about 29m tons of crude oil a year is to pass through Primorsk, bypassing the main current outlet for oil from northern Russia, the terminal at Ventspils. The Primorsk terminal will spare Moscow from having to transport the oil through Estonia, Latvia or Lithuania, which have profited greatly over the 1990s from fees charged for handling Russian oil and dry cargo passing through the Estonian port at Tallinn and the Latvian ports at Riga and Ventspils, as well others. (Analysts say that as much as 25% of the economies of Latvia and Estonia are tied to the trade. The governor of the Leningrad region Valeri Serdukov estimates Russia pays at least $2 bn a year in duties and other fees because of the Baltic transit trade).

Transportation Minister Sergei Frank says Moscow needs port capacity of 240m tons a year to handle imports and exports. Moscow first made plans to expand the port capacity in the early 1990s, but the financial problems held back the projects. After Putin succeeded Boris Yeltsin as president and the economy stabilised, port construction became feasible and Putin, a native of St.

Petersburg, made it a priority. The first phase at Primorsk was built in 18 months, rather than the projected four years. The second phase is to be completed in a few years. Among other projects under way is a new port at Ust-Luga, south-west of St. Petersburg, to handle up to 35m tons of coal, iron ore, timber and other dry cargo a year. The docks at St. Petersburg are to be nearly doubled in capacity by 2010, able to handle 60m tons of cargo a year. If St. Petersburg reaches the goal, it will top Ventspils, in Latvia, now the largest port on the Baltic Sea.