GROWING TRANSPORTATION BOTTLENECKS THREATEN WEST SIBERIAN ENERGY DEVELOPMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T01451R000600780001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 27, 2016
• Document Release Date: January 28, 2013
• Sequence Number: 1
• Publication Date: December 1, 1988
• Content Type: REPORT

Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
,
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Intelligence rolileurten Pnol
Secret
Directorate of
Mad i uth
DO NOT GIVE OUT
OR MARK ON
25X1
Growing Transportation Bottlenecks
Threaten West Siberian
Energy Development
A Research Paper
?PROJECT NUMBER ren/r9.4 0.29 e9
w
PAGE NUMBERS /6
7rfrAL NUMBER OF COPIES
DISSEM DATE Veri/./0
EXTRA COPIES gs ?2 4K5Z
RDCORD CENTER 4ts-2 _S?OS0
JOB 'NUMBER 0257-1 9
Secret
SOV 88-10081
December 1988
Copy 431
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Cop,y Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
aecret
* Intelligence
Reverse Blank
Growing Transportation Bottlenecks
Threaten West Siberian
Energy Development
A Research Paper
25X1
25X1
25X1
This paper was prepared by
Office of Soviet Analysis, with a contribution by
25X1
SOYA. Comments and queries are
25X1
welcome and may be directed to the Chief, Economic
Performance Division, SOYA
25X1
25X1
Secret
SOV 88-10081
December 1988
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
25X1
Summary
Information available
as of 31 October 1988
was used in this report.
Growing Transportation Bottlenecks
Threaten West Siberian
Energy Development
Increasing oil and gas output from West Siberia's vast energy wealth is the
linchpin in the USSR's master plan to keep national output of these fuels
stable or rising through the end of this century. So far, West Siberia has
generally met its energy production targets, but an apparent decision to
develop producing fields before the transport infrastructure is fully in place
has created many difficulties.
To sustain sharp growth in gas output and marginal gains in oil production
in the 1990s, the Soviets must develop fields that substantially increase
demands on transport services:
? To offset declining output from West Siberia's handful of aging giant
oilfields, the Soviets plan to develop 94 relatively small fields during the
period 1986-90 and to bring on line a larger number of even smaller
fields in the early 1990s. This creates escalating demands on transport
construction, particularly since the new fields are located farther from
established supply bases than were fields developed before 1986.
? Gas production is moving north; the Soviets count on the giant Yamburg
field to provide nearly all the increment in national production during
1986-90. They plan to sustain growth in the 1990s by developing the
Bovanenko and Kharasavey deposits on the Yamal Peninsula. These
fields also are located farther from established services than were their
predecessors and challenge the Soviets with more inhospitable develop-
ment conditions.
Soviet development plans and continuing obligations to serve established oil
and gas fields suggest that overall transport demand to meet the needs of
the West Siberian energy industry will rise at least 50 percent during 1988-
93.
Soviet transport is not prepared to meet these demands. In the early 1980s,
Moscow slowed the development of transport services, and Soviet press
reports indicate this has led to increasingly frequent transport shortfalls
since 1985. More ominous, delays in river dredging and in construction of
port facilities, roads, and especially railroads threaten to retard develop-
ment of the new fields. We cannot accurately project the extent of likely
delays to individual projects because we are uncertain how Soviet authori-
ties will ration strapped transport services and to what lengths they will go
111
Secret
SOV 88-10081
December 1988
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
to try to overcome the shortfalls. Nevertheless, given current development
priorities and transport programs, we believe each of the following major
programs is a candidate for delay, in increasing order of likelihood and
severity:
? Transportation problems could cause a limited delay in bringing the
giant Yamburg gasfield up to full capacity. Poor track conditions have
severely restricted rail deliveries to the project and will hinder efforts to
meet plans for increased shipments needed to complete construction.
Rivers and the northern sea route will not be able to compensate fully for
rail shortfalls. Moscow could offset delays in developing Yamburg with
continued overproduction from the Urengoy gasfield, but this would
reduce ultimate gas recovery and cause a faster-than-expected output
decline?a concern expressed by Gorbachev in his September 1985
speech in Tyumen' Oblast.
? Chances are better than even that the transport infrastructure will not be
able to meet the demands of exploiting smaller and more remote oilfields
as well as the increasing requirements to maintain existing wells.
Dredging the small rivers to a navigable depth to support development of
these fields will not be complete, and truck transport cannot be adequate-
ly developed because of the high costs and long leadtimes necessary to
build an integrated road system. This increases the likelihood that oil
production in West Siberia, and hence national output, will fall in the
1990s. The extent of any national decline, however, will depend on how
rapidly the Soviets can bring new production from the Pre-Caspian Basin
on line.
? Transportation problems probably will set back plans to develop the
Bovanenko and Kharasavey gas deposits on the Yamal Peninsula in the
early 1990s. A several-hundred-kilometer rail line needed to deliver the
enormous volume of freight required is presenting the Soviets with
unparalleled challenges and high costs. It is already considerably behind
schedule. To meet plans to expand gas production in the 1990s, the
Soviets must first make substantial improvements in transport infrastruc-
ture on Yamal. If they do not, growth in West Siberia's gas output will
probably slow.
Although the Soviets may be able to moderate the severity of transporta-
tion bottlenecks, the cumulative shortfalls, especially when contrasted with
the ambitious energy development plans, are so great that some disruptions
are likely. Moscow will need to closely monitor progress in providing
transport support to West Siberian energy development in order to prevent
a serious setback to energy production in the mid-to-late 1990s. Moscow
may also need to accelerate development of oil and gas deposits in other
parts of the USSR, such as the Pre-Caspian Basin and ste us conserva-
tion efforts to moderate growth in energy demand.
Secret iv
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Contents
Page
Summary
iii
Scope Note
vii
The Transportation Challenge
1
Development of Transport Services
2
Getting Freight to West Siberia 3
Moving Freight in West Siberia 6
Servicing Individual Projects 7
Transport Performance: Barely Adequate 8
Maintaining Energy Production in the 1990s: A Growing Transport Challenge 9
Oil: Developing Smaller Fields 10
Gas: Moving North 11
Transport: Falling Further Behind 12
Outlook and Implications 14
Reverse Blank
v Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Scope Note
Reverse Blank
Increasing transport bottlenecks in West Siberia threaten ambitious oil and
gas development plans for the region. This paper attempts to gauge the
impact that such bottlenecks will have on future energy development. It
focuses on the land, water, and air transport systems that deliver the
equipment and supplies needed for development but does not address the
ability of the pipeline systems to deliver oil and gas.
vii
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18 : CIA-RDP89T01451R000600780001-4
Growing Transportation Bottlenecks
Threaten West Siberian
Energy Development
The Transportation Challenge
Development of the West Siberian region of the
USSR has been driven by its vast energy wealth. Gas
was first produced in the region in 1963, and oil
production began in 1964. By 1987 the region was
contributing 65 percent of the USSR's total produc-
tion of crude oil and gas condensate and 63 percent of
its natural gas (see inset and figure 1). Together these
two fuels provide nearly three-fourths of the country's
total energy production. Continued development of
West Siberia, which contains roughly two-thirds of
national oil and gas reserves, will be the main driver
of national energy output through the end of this
century.
Development of transport, in turn, has underpinned
energy development in West Siberia. Virtually the
entire area, which is roughly one-third the size of the
continental United States, was uninhabited wilderness
before oil was discovered in 1960. In the 1960s the
Soviets had to bring in laborers, equipment, and
materials to construct new towns, housing, and facili-
ties to supply electric power and other services. Since
then, the construction of infrastructure has steadily
grown?for example, in the 1986-90 period housing
construction is to be 80 percent higher than in 1981-
85, and construction of electrical generating capacity
is to double. These efforts have largely met demands
for basic services but have not supported development
of an industrial base capable of supplying the region's
own needs for equipment and materials for energy
development.
Transport services, therefore, must also support the
surges in demand for freight associated with the
development of oil and gas fields. The largest volume
of freight is delivered during the first five years after
field development begins. In the next five to 10 years,
' In this paper, the West Siberian oil and gas region includes the
area in Tyumen' and Tomsk Oblasts north of 58 degrees north
latitude, west of 82 degrees longitude, and east of 62 degrees
longitude
1
Secret
the field is in its prime production period, and demand
for transport services is generally much lower. When
output levels off and begins to drop, freight volumes
often increase again because more equipment and
other supplies are needed to perform well workovers,
install new and replace broken pumping equipment,
expand water separation and injection facilities, and
replace gathering lines weakened by corrosion.
25X1
25X1
Meeting demands for infrastructure and energy devel- 25X1
opment is complicated by the severe climate, swampy
terrain, and permafrost that make West Siberia one
of the most forbidding areas of the world:
? Winter temperatures?averaging ?20?C?impair 25X1
or in extreme conditions halt outdoor labor, reduce
the service life of machinery, and increase the
demand for materials and spare parts.
? Climatic swings require juggling of transport ser-
vices. In winter, navigation on the rivers and the
northern sea route is shut down for six to 10 months
each year. In summer, extremely muddy, boggy
conditions make cross-country movement nearly im-
possible and construction difficult. At least one-
third of the region consists of marshes.
? Permafrost conditions require roads and railroads to
be built on fill that is stable enough to resist the
settling and erosion associated with the annual cycle
of freezing and thawing (see inset). Subsequent
maintenance is often more expensive than initial
construction.
The ambitious development programs and forbidding
conditions combine to create enormous demands for
freight. Soviet writings indicate that roughly 40 mil-
lion metric tons of freight?equipment, pipe, ballast,
construction materials, and other supplies?was
brought into the region in 1987 to support West
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
225X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
West Siberian Energy Production
West Siberian oilmen attained the enormous produc-
tion increases of the 1970s by rapidly developing a
small number of large and highly productive fields.
Three giant fields?Samotlor, Mamontovo, and Fe-
dorovo?accounted for nearly 70 percent of oil output
from the region in 1975. In 1980, Samotlor alone
accounted for about one-fourth of national produc-
tion. Despite the introduction of 20 to 22 new oilfields
in 1981-85, most of the region's output still came
from the handful of oilfields brought on line in the
late 1960s and early 1970s. Output from the aging
oilfields began to drop in 1984, and this caused
national oil production to decline in 1984-85 for the
first time in nearly 40 years.
Since the mid-1970s, West Siberia has been the main
base for expansion of national gas output. Since its
startup in 1978, the huge Urengoy field has provided
most of the increase. The Medvezh'ye, Vyngapur, and
Urengoy fields together accounted for over 50 percent
of Soviet gas production in 1985.
Siberian energy development. This compares with 25
million tons in 1980 and nearly 15 million tons in
1975
Development of Transport Services
To support oil and gas development in West Siberia,
Moscow's strategy since the 1960s has concentrated
on gradually building an integrated rail and water
transport system and associated support bases. Soviet
transportation experts have long acknowledged that
railroads are the most practical and cost-efficient way
to move large freight volumes over long distances to
and within the region. Railroad construction, never-
theless, is more costly and time consuming than
construction of other transport modes. According to
Soviet figures, average construction costs in the region
are more than 1 million rubles for 1 kilometer of rail
line, compared with only 1,500 to 8,000 rubles to
Secret
Figure 1
USSR: Growth in Annual Oil
and Gas Production
Oila
Total
West Siberia
1966-70
Gas
1971-75
1976-80
1981-85
1966-70
1971-75
1976-80
1981-85
25X1
25X1
25X1
25X1
'Including gas condensate. ?
2
319953 12-88
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Building a Road in West Siberia
The Soviets must dig a trench, fill it with rock and
sand, and lay a raised surface over the fill. Some of
these trenches are as deep as 11 meters, and the road
surface lies several meters above the level of the
surrounding terrain. Since the cold climate prevents
the pouring of concrete except by using special warm-
ing techniques, prefabricated slabs are used to build
roads. In some areas entire marshes must be drained
and filled with sand. Without adequate preparation,
roads will disappear into a bog or marsh.
Marshy terrain near Urengoy gasfield
deepen 1 kilometer of river. Construction of a major
hard-surfaced road costs 800,000 to 900,000 rubles
per kilometer; winter (ice and snow) road construction
costs about 50,000 rubles per kilometer.'
Getting Freight to West Siberia
Railroads provide the lifeline to the region because of
the very long shipping distances and large freight
volumes. The lion's share of rail freight is transported
A winter road is built either by spreading water over the ground
and allowing it to freeze or by compacting snow
3
to the city of Tyumen', which serves as one of the
region's main supply bases. Some freight is also
delivered for transshipment via the Ob' River to
railheads at Salekhard and Sergino (see figure 2).
Although air transport provides less than 5 percent of
the cargo moved into the region, it is particularly
important because it can be used when other modes of
transportation are unavailable and is essential for
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
secret
Key Settlements in West Siberia
Labytnangi (66? 39'N166? 21'E). Population: estimat-
ed 11,000. From this railhead on the lower Ob', cargo
is transferred to river craft at the port of Salekhard
for shipment to gas exploitation areas.
Mamontovol Pyt'-Yakh (60? 46'N172? 47'E,
60? 45'N172? 50'E). Population: estimated 10,000.
Housing and storage areas at Mamontovo and the
adjacent Pyt'-Yakh rail station support the Mamon-
tovo oilfield.
Megion (61? 03'N176? 061E). Population: estimated
over 10,000. Provides housing and logistic support for
surrounding oilfields. All-weather roads lead to these
fields and to Nizhnevartovsk.
Nadym (65? 32'N172? 32'E). Population: estimated
50,000. One of the largest urban centers in the
northern gas development area, it has schools, stores,
and community services for workers of the surround-
ing gas region.
Nefteyugansk (61? 56'N176* 38'E). Population:
86,000. This is the primary port and supply base for
the Mamontovo and Ust'-Balyk oilfields. It is linked
to them by all-weather roads.
Nizhnevartovsk (60? 56'N/76? 38'E). Population:
212,000. Supports the Samotlor oilfield and smaller
fields nearby. It has extensive port facilities on the
Ob' River, a rail tie to Surgut, all-weather roads, and
an airport.
Novoagansk (61? 571N/76? 411E). Population: estimat-
ed 7,000. Located at the western edge of the Var'ye-
gan oil-producing area, Novoagansk is a support base
for oil exploitation and transport.
Novyy Urengoy (66? 06'N/76' 35'E). Population:
79,000. Served by rail and air, this is the main
support city for the Urengoy natural gas field. Indus-
tries and high-rise apartments are being built.
Noyabr'sk (63* 08'N/75? 22'E). Population: 77,000.
An urban center for the Kholmogor oilfield and
Secret
other oil and gas exploitation. It has a rail-served
storage area covering 3.5 square kilometers (km).
Pan gody (65? 51'N174' 30'E). Population: estimated
6,000. The supply base for the Medvezh'ye gasfield.
Raduzhnyy (62?06'N/77? 31'E). Population: estimat-
ed 5,000. Supports nearby oilfields and is the termi-
nus of an all-weather road from Nizhnevartovsk, 140
km to the south.
Sergino (62? 30'N165? 38'E). Population: estimated
6,000. Rail terminus where cargo is transferred to
river craft or to trucks traveling the winter road to
the Urengoy gasfield.
Staryy Nadym (65? 35'N/72? 421E). Population: esti-
mated 2,000. This expanding port serves the city of
Nadym (11 km southwest) and the Medvezh'ye and
Urengoy gasfields.
Strezhevoy (60? 42'N/77' 34'E). Population: estimated
10,000. This port, 60 km southeast of Nizhnevar-
tovsk, supports the Sovetskoye oilfield and new oil
exploration along the Vakh River.
Surgut (61? 14'N173? 201E). Population: 227,000. The
key housing, industrial, and supply center of the
middle Ob' oil region. It has large mechanized port
facilities, an all-weather airport, and rail facilities.
Uray (60? 08'N164? 48'E). Population: estimated
20,000. Supports an oil exploitation area west of the
Ob'. It is served by river craft and an all-weather
airport; a dirt road connects it to a railhead at
Mezhdurechenskiy.
Urengoy (65? 58'N178? 25'E). Population: estimated
9,000. Development of Urengoy gasfields stimulated
construction of port facilities and storage areas.
These facilities are expanding along the left bank of
the Pur River to the site of the rail yard and
projected city of Tikhiy.
4
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Figure 2
Major Transportation Links in the West Siberian Oil and Gas Region
Area of map
Tyumen'.
Soviet Union
Kharasavey
Kara Sea
Ostrov
AkVaygach
? Arkhangel'skaya
Oblast'
..tr- To
Kotlas
Komi
ASSR
Vernal
Mys Peninsula
harasavey
Ostrov
elyy
or.
NBovanenko
t?-?
tss) Seyakha
0
k
01
lbjinasfrr
Si ova
Ostrov
Olenijp0
Gydan
Peninsula
?0
Yamburg
Mys smennyy ? (19
i
VIA a {
m P, in:7,
ri Novyy o m
r' *
Kharp / `0
0 A proximtn
alignment
Labytnangi ?6
8
Berbzovo,
?
lor
41.15-5
Salekhard
Ny
itharavo
)41=T;;Coi-siy
.Sambu
Med
(19
Staryy
Nedym angod
Nadym?
Tyumenskaya
Sutormin
(1982D
?Beloyarskiy Oblas Karamov
(1980)
Peregrebnoye
Punga
(1966)
Sergino
Sovetskiy
Ar-To
Se
. ?
t=7
Kholmogor,?,
(1976) V
a
Krasnoleninskiy Fedorovo
Komsomorto
0
Khanty-Mansiysk?
? Uray
Sverdlovskaya
Oblast'm
Sverdlovsk
klezhdurechenskiy
Dem'yanskoye
To
Tobol'sk
Tyumen
?
ren oy
8)
\
Railroad 4, Port
Population
? Over 100,000
o 10,000-100,000
? Under 10,0000
C) Oilfield' 4C) Gasfieldb
rengok
Nrengoy
Tark ale
0
Vyngapur
78) 0
Noyabilk
0 A ?
Raduzhn
Novoagansk.
nf19 el
9.
73) ::) Aga
Ob IS ut rillir
4 -. pAtmotioA 969)0\
--
Neftey n ?Ak Lokosovo . `Ltelizt=t
o -N
)Mamontovo(1970
0,
PYP-Y'
.
a Not all places under 10,000
are shown.
b Dates indicate start of
production:
gla
Dubka ?1, Norirsk
Krasnoyarskiy
Messoyakha Kra
TIC
.w.
?
Strezhevoy
``illeksandroyskoye
O 150 Kilometers
I
O 1h0 Mil
Tomskaya
Oblast'
lgark
0
5
Secret
715211 (A00894) 12-88
25)(1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
transporting people and priority freight.' Less than Figure 3
5 percent of the total freight volume (mostly imported Estimated Length of Primary Rail Lines
large-diameter pipe) is transported along the northern Put Into Operation in the West Siberian
sea route by freighter from Nakhodka and Murmansk Oil and Gas Regiona
to the Yamal and Taz Peninsulas.4
Most settlements developed along major waterways as
ports and supply bases for the region's early oil and
gas exploration and development. Many became ma-
jor supply and housing centers on the road and rail
systems that later penetrated the region. They now
serve as hubs of the region's expanding pipeline and
petroleum-processing facilities.
Moving Freight in West Siberia
Despite the short navigation season, rivers move most
of the freight traffic (in terms of ton-kilometers)
within West Siberia. Soviet statements indicate that
planners realized early on that the extensive river
network provided an opportunity to add transport
capacity at a relatively low investment cost. In
1981-85, more than 6,000 kilometers of the region's
20,000 km of navigable waterways were deepened,
and the ports of Nadym, Urengoy, Labytnangi, and
Sergino were improved to increase their transship-
ment capacities.
West Siberia's 3,000 km of primary rail lines carry
roughly 40 percent of the region's freight traffic. They
consist of one main trunk line?from Tyumen' to the
Taz Peninsula?and only two major rail spurs?one
to Nizhnevartovsk and the other to Staryy Nadym.
The pace of primary rail line additions rose steadily
through the 1970s but fell dramatically during 1981-
85 (see figure 3). Information on rail construction
plans for 1986-90 is sketchy, but the length of prima-
ry rail lines to be built appears to be roughly the same
as that put in place during 1981-85. Nearly all of the
construction during the period will be on the
' Year-round air links have been established between major Soviet
cities, such as Moscow and Chelyabinsk, and the larger cities of the
region?Surgut, Nefteyugansk, Nizhnevartovsk, Strezhevoy, No-
vyy Urengoy, and Nadym. In 1985, the Nizhnevartovsk and Surgut
airports served a total of about 1 million passengers. During 1986-
90 the Soviets plan to build eight new airfields at oil and gas
deposits.
' The Soviets that use of the northern sea route shortens
delivery time to the far north to about 45 to 50 days compared with
six months to a year via Tyumen'.
Secret
Kilometers
1250
1000
750
1"0
250
1971-75
1976-80
Does not include construction of secondary
rail lines?mostly sidings, spurs, and track at
yards and stations.
1981-85
319955 12-88
Yamal Peninsula. A 540-km rail line that will link the
Bovanenko gas deposit with the city of Labytnangi is
under construction.
Roads account for only about 5 percent of total
traffic, despite a large surge in road construction
during the 1980s (see figure 4). At the end of 1987,
the region was not connected by an all-weather road
system to the industrialized parts of the USSR, the
key regional cities were not interconnected, and no
major pipeline had a parallel all-weather road. Only
about one-fifth of the region's roads are hard-sur-
faced, and the proportion is much less in areas where
6
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Figure 4
Roads in West Siberian Oil and Gas Region
Hard-Sad-aced Road Additions
? Hundred kilometers
50
40
30
20
10
1971-75
1976-80
Include; all roads in the region.
1981-85
1986-90
(planned)
Breakdown of Roads by Types
development has recently begun. During 1986-90, the
Soviets plan to construct 5,000 km of hard-surfaced
roads, including beginning work on a 300-km hard-
surfaced highway from Urengoy to Yamburg. A
major part of a Sverdlovsk-to-Tyumen' hard-surfaced
road is also planned. The road will be the first all-
weather road link from the region to the western
USSR.
Servicing Individual Projects
The handful of giant fields that produce the bulk of
the region's oil and gas are linked to supply centers by
railroad and a few by all-weather roads. Their early
7
319956 12-88
development, however, was supported almost entirely
by the water and winter road transport systems:5
? The Samotlor, Mamontovo, and Federovo oilfields
were developed in the mid-1960s, about the time a
The water and winter road transport system has continued to
support the development of these fields. Large gas-processing plant
sections, for example, are assembled in Tyumen' and delivered on
pontoons to the Taz Peninsula via the river system, a distance of
2,600 km. These pontoons are then dragged by vehicles to the
Yamburg field over snow and ice.
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
rail line to Tobol'sk was completed. Freight deliv-
ered to Tobol'sk was transshipped several hundred
kilometers on the river system to ports near the
fields and then by trucks over winter roads. Rail
service to these fields was not established until two
to seven years after development began, when they
were in their prime production stage.
? The buildup of production from the major gasfields
was supported mainly by freight transshipped from
the rail system to rivers and winter roads and to a
lesser extent by freighters via the northern sea
route. Direct rail service was established five to 10
years after development began, when the fields were
already producing large volumes of gas.
Transport Performance: Barely Adequate
Soviet leaders chose to develop West Siberian energy
before the supporting transportation infrastructure
was fully in place. Inadequate capacity and poor
scheduling have led to chronic transportation bottle-
necks, and shortfalls in meeting delivery commit-
ments have frequently been cited in the Soviet press
(see inset). The Soviet
approach contrasts sharply with the integrated ap-
proach to field development followed by US firms at
Prudhoe Bay (see inset).
Although transport shortfalls have disrupted and de-
layed energy development, they have not generally
undermined the region's ability to meet energy pro-
duction plans. Natural gas output has met or exceed-
ed annual targets. The region's oil production has
fallen slightly short of targets in recent years, partly
because of inadequate transport to support explora-
tion and field development and the expansion of
electric power facilities. Nevertheless, plans to com-
mission new oilfields generally were met through
1987.
Under the circumstances, skimping on West Siberian
transportation development may have been a rational
decision:
Secret
? Oil and natural gas production in established fields
in the western USSR was declining in the 1970s,
largely because of poor field management. The
Soviets needed immediate gains from West Siberia
to satisfy their voracious appetite for energy.
? The Soviets faced a chronic shortage of investment
and transport construction resources. Development
of West Siberian transport was already expensive,
constituting at least 25 percent of the region's
spiraling energy costs, according to the Soviet press.
In the early 1980s other transport projects?espe-
cially the Baikal-Amur Mainline Railroad?were
accorded higher priority and drew resources away
from West Siberia.' And the need to reverse a
national decline in rail performance in the early
1980s was probably too great for Soviet planners to
divert resources from other parts of the country.
Although perhaps rational in the short run, lagging
transport development imposes potentially severe
long-run costs. Poorly managed, accelerated develop-
ment and production of established energy fields can
substantially reduce lifetime fuel production (see in-
set). For example, peak production at the largest
Soviet oilfield, Samotlor, was sustained for only one
year, after which output fell by roughly 30 percent
within five years. In contrast, the maximum level of
output from the Prudhoe Bay field in Alaska was
sustained for about 10 years.
Moreover, West Siberian transport, already strained,
is likely to have considerably greater difficulties meet-
ing the larger challenges of the 1990s. As indicated
earlier, the construction of transport facilities?and
especially railroads?slowed in the early and mid-
1980s. As a consequence, key transport projects are
considerably behind schedule and are unlikely to be in
'Nearly one-third of national primary railroad construction took
place in West Siberia during 1976-80; only about one-tenth was
completed during 1981-86
8
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Transport Bottlenecks: Cases and Causes
The Soviet press is rife with examples of transport
bottlenecks that have prevented timely delivery of
equipment and supplies to support West Siberian oil
and gas development. All modes of transport are
responsible for the delays.
On the rail system:
? Because of insufficient unloading sidings, thou-
sands of railcars waiting to be unloaded reportedly
often block traffic on the single main track from
Tyumen' to Urengoy.
? Widespread shortages of cranes and storage facili-
ties turn whole trains into "warehouses on wheels."
The failure to efficiently schedule freight deliveries
adds to the problem, because several loaded trains
often arrive at one location within a short timespan.
? Because there are not enough specialized freight
cars to transport bulk materials, several thousand
cars must regularly be pulled off the railroad for up
to several weeks in the winter when coal, crushed
stone, and other cargo freeze into a solid mass.
? Commuting oil and gas field workers frequently
have to wait at stations for up to several days for
space on a train.
On the region's rivers:
? The Ob'-Irtysh Steamship Company was unable to
ship 2- to -3 million tons of freight each year during
the early 1980s, roughly one-tenth of the total
shipments to support energy development in the
region.
? Ports serving as major transshipment points report-
edly lack sufficient freight-handling equipment to
transfer freight onto river craft.
? Shortages of ships, boats, and barges are com-
pounded by scheduling problems. In 1986 over
1,300 loaded railcars accumulated at several loca-
tions because of insufficient river craft; yet in 1985
the river fleet was reportedly idle for 8 million ton-
days more than planned because of delayed rail
deliveries.
Inadequate roads have also created problems:
? Chronic shortages of road construction equipment
and materials reportedly force builders to take
shortcuts to meet unrealistically high road con-
struction plans. Failure to build adequate roadbeds
in permafrost areas means that roads frequently
sink into the ground during the spring thaw and are
more susceptible to flooding. Workers reportedly
find themselves in an endless cycle of rebuilding the
same shoddy roads each year.
? Delays in building and using winter roads are
frequently cited as the cause of delays of up to six
months in the delivery of crucial equipment to
individual oil and gas fields.
a position to adequately support development of the
new oil and gas fields essential to sustaining West
Siberian production.
Maintaining Energy Production in the 1990s:
A Growing Transport Challenge
West Siberian energy development and production
are moving into areas that promise to substantially
increase demand for transport services. The Soviets
9
plan to offset declines from established fields by
developing a larger number of smaller fields and by
moving into areas even more remote and inhospitable
than the areas of current production. Each thrust
promises to accelerate demand for transport services.
But transport appears to be less well equipped to meet
the surge now than it was in the 1970s and early
1980s.
Secret
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Oil Development Strategy on Alaska's North Slope
US oil companies developing the Prudhoe Bay field
on Alaska's northern coast faced problems similar to
those confronted by Moscow in developing West
Siberia. The Alaskan deposit is located well above
the Arctic Circle (at about the same latitude as the
Bovanenko gas deposit on the Yamal Peninsula) in a
region of severe winter weather and continuous per-
mafrost, far from equipment suppliers and a labor
pool. US oil company officials estimate that trans-
port costs at Prudhoe Bay constitute about 20 percent
of the total delivered cost of equipment and materi-
als.
US firms adopted an efficient strategy of building a
supporting infrastructure before beginning oil devel-
opment in earnest. Transport construction proceeded
in three stages:
? During exploration and very early development,
transport was provided by helicopters, all-terrain
vehicles, and trucks traveling over winter roads.
? A port that can accommodate four large barges was
built, but the six- to eight-week shipping window
limits the amount of freight that can be delivered.
Moreover, even if enough supplies could have been
brought in, reliance on sea transport would have
been uneconomical because of the high cost of
storing one year's supply of equipment.
? Trucks transported most of the equipment and
supplies on a 650-km all-weather road constructed
to the site from Fairbanks. To insulate the road
from the permafrost, several million tons of locally
available gravel was used to build a bed 5 feet high
and 30 feet wide. According to US officials, without
a nearby gravel supply, the road's construction
would have been prohibitively expensive. And, with-
out the road, the oil project would not have been
economically feasible.
To maintain stable production, US oil companies
built a housing complex, including a gymnasium,
movie theater, and television system to attract and
retain a labor force. Workers commute by jet aircraft
from Anchorage, alternating two-week tours of duty.
Oil: Developing Smaller Fields
By 1990, oil production from West Siberia is sched-
uled to provide nearly 70 percent of national output,
offsetting production declines in other regions. Once
West Siberian oil production ceases to grow, national
output will almost certainly fall. The extent of this
decline, however, will depend on how rapidly the
Soviets can bring new production from the Pre-
Caspian Basin on line.
Soviet ability to keep West Siberian oil output grow-
ing depends critically on bringing new fields into
production rapidly enough to offset declining output
from 46 fields that were developed in the 1960s and
1970s and 20 to 22 fields developed in 1981-85. On
Secret
the basis of average field size and likely production
potential, we estimate that the 94 small fields sched-
uled for development during 1986-90 could account
for about 20 to 25 percent of total West Siberian
production by 1990. In the 1990s the Soviets will need
to develop an even larger number of smaller and more
remote oilfields.
These plans create escalating challenges for transport
services:
? The 94 oilfields apparently are scheduled to be
developed at least as fast as fields have been
developed in the past, and similar momentum will
have to be maintained for even smaller fields in the
1990s.
10
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
Transport: A Vital Link in Oil Development
Maximizing a field's ultimate oil recovery and ensur-
ing a high and stable level of output over a field's life
require balanced and timely development. This
means that drilling and production proceed according
to a preestablished plan that is strictly adhered to:
water treatment plants are built before water injec-
tion begins; water-injection programs are uniform
and carefully monitored over the field's producing
strata; and the field's producing infrastructure is
properly maintained. In short, this requires the time-
ly delivery of equipment and supplies in the right
volume.
In West Siberia, however, transportation bottlenecks
often prevent or delay the arrival of needed equip-
ment. The following typical Soviet oilfield develop-
ment practices are exacerbated by such bottlenecks:
? Delays in the delivery of drilling equipment and
drilling supplies lead to uneven field development.
? Wells idled because of pump shortages cause oil-
field managers to step up production from other,
wells with little regard to how this may eventually
damage the overworked equipment.
? Water injection begins before water treatment
plants are completed. The use of untreated water
eventually leads to major corrosion and well-plug-
ging problems.
? Water injection begins in one area at a larger rate
than planned because the construction of other
water-injection facilities is behind schedule. Exces-
sive water injection leads to rapidly rising water
production and frequently to pump failures.
This approach has a domino effect. The decline in a
field's production is faster than anticipated, forcing
accelerated development of other new fields. Inade-
quate transport infrastructure often leads to repeti-
tion of the same inefficient development practices.
11
? New fields are located farther from established
supply bases than were fields developed before 1986.
In the 1960s there was already some river shipping
near the large oil deposits on the Ob' and Irtysh
Rivers, but, as of 1985, the Soviets had virtually no
transport infrastructure established within 100 km
of many of the fields.
? Development of the requisite transport infrastruc-
ture will be expensive and time consuming. The
Soviets want to develop the region's vast network of
small rivers, but in 1985 most of the rivers reported-
ly needed to be surveyed and the Soviets needed
considerably more shallow-draft boats and barges.
The planned construction of a 2,500-km skeletal all-
weather road system to serve all 94 fields would cost
roughly 2 billion rubles?one-half of the entire
region's road construction budget for the 1986-90
period.
? Transport services concurrently must support main-
tenance of an ever-growing number of established
fields and wells.
Gas: Moving North
By 1990, gas production from,West Siberia is sched-
uled to provide about 75 percent of national output.
The giant Yamburg field is to provide nearly all of the
increment in national production during 1986-90.
During the 1990s, Moscow plans to continue to boost
national output mainly by developing the Bovanenko
and Kharasavey deposits on the Yamal Peninsula.
25X1
25X1
25X1
Development of these gas deposits increases transport
challenges because of their distance from established
services and because of more inhospitable develop-
ment conditions. When the Urengoy field was devel-
oped in the late 1970s, the Soviets could rely on river 25X1
transport and some preexisting infrastructure. The
Soviets also confronted more manageable problems
with permafrost. In contrast:
? The Yamburg field is located above the Arctic
Circle, much farther away from supply bases and a
labor pool than any other producing field. The
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
several thousand people who work at the site com-
mute more than 200 km from Novyy Urengoy and
Nadym for short tours of duty; many have to be
transported by helicopter. Although its require-
ments are not as great as those for completely
developing Urengoy, Yamburg still requires a huge
volume of freight, a large share of which is the
ballast needed for facility construction (see inset).
Shipments to the project via the river system are
planned to rise to 4.8 million tons annually by
1990?more than triple the 1-1.5 million tons that
we estimate were delivered in 1985?and the Sovi-
ets also plan to boost shipments via the northern sea
route.
? Bovanenko and Kharasavey, about 80 km apart, are
located in an area with virtually no existing trans-
port infrastructure. The Soviets plan to develop the
fields by rotating thousands of workers for short
tours of duty from Labytnangi; they apparently
consider the cost of building the infrastructure
necessary to maintain a permanent on-site work
force too high. Timely development depends on the
completion of the rail line from Labytnangi, accord-
ing to a Soviet deputy minister of the gas industry.
To provide a supporting roadbed, the Soviets plan
construction of an enormous embankment that re-
portedly will require 50 million cubic meters of
ballast?some 90 million tons?and will cost several
billion rubles. A total of 101 bridges and hundreds
of water-drainage conduits to handle melted snow
and ice during the summer are also planned.'
Transport: Falling Further Behind
The apparent decision taken in the early 1980s not to
fully develop transport services in step with acceler-
ated energy development has led to a growth of
transport shortfalls since 1985. Moreover, work on
several major transport construction projects needed
to meet energy development demands in the 1990s
either has not been started or has been severely
delayed
In late 1986 the Soviet press stated that sand and gravel were
being excavated from an Ob' River tributary near Labytnangi for
use in West Siberian energy-industry construction. Some of these
materials are reportedly earmarked for use in construction at the
Yamburg field, but some are robably being used to build the
Yamal Peninsula rail line.
Secret
Major Components of Freight Requirements To
Support Yamburg Gasfield Development in 1986-90
Gasfield Equipment
Ten gas-treatment plants a
Five ethane-extraction plants
Tank farms
About 2,300 kilometers of introfield gas pipelines
Equipment to drill and outfit 780 wells
Supporting Infrastructure
Airport with hard-surfaced runway
Trucks and other vehicles
Construction equipment
At least 8,500 square feet of housing
Fuel, food, and other provisions for about 10,000
people
Other Construction Materials
40 million cubic meters (about 64 million tons) of
gravel or other ballast materials to build insulating
beds over the permafrost b
Concrete slabs and mix for building foundations and
roads
a The 10 plants require the delivery of about 250 preassembled
sections, weighing a total of 600,000 to 750,000 tons. The first
three plants were successfully delivered at the end of 1987.
b This figure is an estimate by a Soviet engineer working on the
project. He also estimated that more than 2.5 million cubic meters
(about 4 million tons) of ballast material was needed for construc-
tion of the first gas-treatment plant that was completed in 1986.
Railroads appear to be in the worst shape. The
inadequacies of existing railroads, which are operat-
ing at capacity and straining to meet obligations,
reportedly are disrupting energy development, mainly
at new oilfields and at Yamburg. In June 1986
officials complained that only about 30 freight cars
per day were arriving at Yamburg. In 1987 the
director of the Yamburg gasfield complained that the
235-km rail line from Novyy Urengoy to Yamburg
12
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18 : CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
was virtually unusable. An inadequate roadbed over
the permafrost limits the amount of freight that each
railcar can carry, and extreme temperature changes
often cause rails to come loose from the ties. Poor
track conditions force trains to travel very slowly, and
spring flooding over the rail lines frequently delays
shipments. Insufficient rail capacity may have been
the reason that helicopter crews were working over-
time in 1987 to transport urgently needed workers
from Urengoy to Yamburg.
Plans for new railroads are reportedly inadequate to
meet requirements, and even these plans are not being
implemented. A railroad official complained in a
press article in December 1985 that, during 1986-90,
projected rail freight shipment increases for the re-
gion were much greater than planned capacity in-
creases. The official flatly stated that a second track
on the Tyumen'-to-Urengoy rail line would have to
"be built immediately." Because that track would
take several years to complete, he insisted that addi-
tional sidings "must be started literally today." Dou-
ble-tracking the rail line from Tyumen' to Urengoy
would cost more than 2 billion rubles. The line has not
been double tracked, and in 1986 nearly all requests
to build rail sidings in the region were turned down
because of insufficient resources.
The volume of unfinished construction reportedly is
enormous and growing. In 1986 a regional railroad
official complained that nearly every rail construction
project in the region was incomplete. Soviet press
reports support his complaint:
? In mid-1988, track construction at the Nizhnevar-
tovsk railway station that was started in 1981 and
scheduled for completion in 1985 was not yet
finished.
? By 1987 the Surgut railway station and the Tobol'sk
railcar maintenance facility had yet to be completed
after 10 years of work.
? Most sidings and railheads have not yet been built
on the Novyy Urengoy-to-Yamburg rail line.
? In 1986 the backlog of unfinished construction
along a total of 100 kilometers of rail line from
Surgut to Nizhnevartovsk and from Tobol'sk to
Noyabr'sk amounted to 165 million rubles.
13
According to the same official, as soon as a rail line is
formally accepted by the Ministry of Railways (after
traffic starts up), the Ministry of Transport Construc-
tion sharply reduces the funds available to finish work
(such as sidings) and quickly transfers construction
workers to other projects in the region.
Most serious, construction of the Labytnangi-to-
Bovanenko rail line appears to be well behind sched-
ule. In late 1985 the Minister of Transport Construc-
tion complained that plans to complete the rail line by
the end of the decade were unrealistic considering
available resources, adverse weather conditions, and
construction difficulties. He stated that researchers
had not completely figured out how to adequately
build a rail line over the sand and loam permafrost.
Work began in 1986, and by October 1988 the Soviet
press reported that less than 100 km had been com-
pleted.
In mid-1987, only 1,500 workers
were working on the project, but the Soviets projected
that a labor force of 15,000 would be needed by mid-
1988. The 1990 planned startup date for the rail line
to Bovanenko implies a construction rate higher than
that for any of the region's other rail construction
projects to date. Failure to meet the deadline would 25X1
undermine development plans for the entire Yamal
Peninsula. Freight is currently being delivered to a
makeshift ice port and trucked over winter roads to
the deposits (see figure 6).
25X1
25X1
25X1
25X1
River transport appears increasingly strapped. The
Ministry of the River Fleet was harshly criticized in
the press in 1986 by the first secretary of the Tyumen'
Oblast party committee for not planning an adequate
transport capability to support development of the
small oil deposits using the river system. He projected
that the planned 25-percent increase during 1986-90
in freight deliveries by the Ob'-Irtysh Steamship
Company via small rivers would not meet projected
requirements. An enormous amount of preliminary
work is still needed to meet future requirements, in-
cluding surveying and dredging the rivers to navigable
Secret
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Secret
depth. The party leader also implied that a severe
shortage of shallow-draft vessels would develop, com-
plaining about an existing shortage of at least 65 to 70
boats and 100 to 120 barges, which could only be
overcome by diverting vessels from other river ship-
ping organizations outside the region.'
Road construction is falling further behind. In mid-
1987 the director of the Yamburg gas project com-
plained that so far there "is no sign" of the vital
Urengoy-to-Yamburg highway.' The Soviet press has
reported that failure to complete planned road con-
struction on time delayed drilling in the Yamburg
gasfield and the scheduled startup in 1985 of the
Yershovoye oilfield. The Soviets planned to link this
small oilfield to the Vakh River and also to the
Surgut-to-Nizhnevartovsk highway, but, by the end of
1985, only about 20 km of the roughly 60-km route
9 In mid-1988, not enough ships able to navigate the rivers and the
turbulent Ob' Gulf waters to Yamburg were available, according to
a Soviet transport journal. In late 1987, officials of the region's
river fleet complained that they needed 40 to 50 more such vessels
but that they were only getting four or five each year.
The director also stated that the planned Yamburg airport is not
yet ready for use. In early 1988 a press report complained that only
one-fifth of the 95-million-ruble budget for the airport's construc-
tion had been spent. Cargo aircraft began delivering freight to the
airport in 1986, using a temporary runway. Even when the airport
is finally completed, air transport will be able to deliver only a small
share of the freight that will be needed.
Secret
was complete. New road construction is probably
being hampered because road repair and reconstruc-
tion may require the diversion of increasing amounts
of construction resources as the overall length of roads
increases. This could become an increasingly large
burden because most of the roads built during the late
1970s and early 1980s may soon need reconstruction.
Outlook and Implications
West Siberia's transport system will be inadequate to
fully support energy development through the early
1990s. We project that overall freight transport re-
quirements to support West Siberian oil and gas
development?including necessary infrastructure?
will rise at least 50 percent during 1988-93. This
projection is based mainly on Soviet projections of
rising demand for transport services.
The pace of ongoing construction, however, along
with chronic shortages of investment resources, indi-
cates that far less capacity will be added. Moreover,
the capacity increasingly will be strained as the
14
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
secret
Figure 6. Varna! Peninsula ice port
number of customers and volume of long-distance
shipping continue to rise. In the coming years the
growing competition for investment and other re-
sources?from agriculture, machine building, and
consumer goods producers?will almost certainly
guarantee that Moscow will continue a policy of
developing the transport system in West Siberia "on
the cheap." Indeed, the cost of building an adequate
rail and all-weather road system in the near term that
would fully meet energy development needs would
add billions of rubles to existing expenses, even if
enough labor and equipment resources could be made
available.
Bottlenecks on the railroad system probably will
become worse, because the system's capacity will
become increasingly inadequate as the demand for
shipments rises. The outlook for the development of
long-distance trucking as a viable alternative is dim
because of a continuing shortage of roads. These
factors will combine to place an increasing burden on
the region's river system and the northern sea route,
and we believe they will not be able to measure up
fully to the challenge. Most of the region's key ports
will continue to have inadequate capacity, and short-
ages of boats and labor will probably continue.
the port capacity in the
15
northern part of the region would have to more than
double during 1987-90 and more than double again
by the year 2000 to fully satisfy demand
25X1
25X1
We cannot accurately project how much the planned
development of individual projects will be delayed by
these transport constraints because we are uncertain
about the size, composition, and location of potential
delivery shortfalls. Moreover, continuing labor and
equipment shortages would probably delay some pro-
jects even if adequate transport capacity were in
place. Also, Moscow could choose to adjust develop-
ment schedules and subsequently alter priority for 25X1
shipments. Nevertheless, given current development
priorities and transport programs, we believe the
following energy projects are candidates for delay, in
increasing order of likelihood:
? Transportation problems could cause a limited delay
in bringing the giant Yamburg gasfield up to full
capacity. Even if freight earmarked for Yamburg is
given priority on the Tyumen'-to-Urengoy rail line,
the Soviets would still have problems increasing
traffic on the Urengoy-to-Yamburg rail line because
of its low weight-bearing capacity. Moreover, likely
Secret
Declassified in Part - Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
delays in completing the Urengoy-to-Yamburg
highway will prevent long-distance trucking from
becoming an alternative. Moscow will probably
offset delays in developing Yamburg with continued
overproduction from the Urengoy gasfield. Al-
though Urengoy is a huge field, sustained over-
production could affect ultimate gas recovery and
cause a faster-than-expected output decline in the
future, a concern expressed by Gorbachev in his
September 1985 speech in Tyumen' Oblast.
? Chances are better than even that the transport
infrastructure will not be able to fully meet the
demands to exploit a growing number of smaller
and more remote oilfields and also meet the increas-
ing requirements for maintenance of existing oil
wells and associated equipment. Dredging the small
rivers to a navigable depth to support development
of these fields will not be complete, and truck
transport cannot be developed substantially because
of the high costs and long leadtimes necessary to
build an integrated road system. This increases the
likelihood that oil production in West Siberia, and
hence national output, will fall in the 1990s.
? Transportation problems probably will set back
development of the Bovanenko and Kharasavey gas
deposits in the early 1990s. Even if the Labytnangi-
to-Bovanenko rail line were completed on time,
operating problems probably would restrict traffic
flow. Likely delays in building intrafield roads will
also prevent much development during the approxi-
mately four-month period when the top layer of
permafrost melts. To meet plans to expand gas
production in the 1990s, the Soviets must first make
substantial improvements in transport infrastruc-
ture on Yamal. If they do not, rowth in the region's
gas output probably will slow.
Secret
If growing transport bottlenecks should threaten to
substantially delay energy development, the Soviet
leadership would have several options available. Mos-
cow could, for example, divert even more rail or road
construction capacity from other parts of the USSR,
step up the use of helicopters, or import more trans-
port equipment, such as all-terrain vehicles and boats.
East European countries could be called upon to
supply equipment and labor. Any new, major rail or
road construction, however, would probably take sev-
eral years to complete, and the risk of diverting more
domestic railroad construction and rolling stock might
be too great for the Soviet leadership. In 1987 the
laggard performance of the railroads was a primary
cause of the poor performance of the economy and
provided a warning sign that the national railroad
system has little capacity to spare.
On balance, although the Soviets may be able to
moderate the severity of transport bottlenecks, the
cumulative shortfalls, especially when contrasted with
their ambitious development plans, are so great that
some disruptions are likely. As a result, Moscow will
need to closely monitor progress in providing transport
support to West Siberian energy development in order
to prevent a serious setback to its energy production in
the mid-to-late 1990s. In view of potential setbacks to
West Siberian energy development, Moscow may also
need to accelerate development of oil and gas deposits
in other parts of the USSR such as the Pre-Caspian
Basin and step up conservation efforts to moderate
growth in energy demand.
16
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4
secret
Secret
Declassified in Part- Sanitized Copy Approved for Release 2013/03/18: CIA-RDP89T01451R000600780001-4