Russian state oil pipeline operator Transneft has approved a plan for the construction of an oil export pipeline bypassing Belarus, the head of the company said on Monday.

"We have made a decision and will develop the Baltic Pipeline System from Unecha (on the border with Belarus) to the port of Primorsk" on the Baltic Sea, Transneft President Semyon Vainshtok was quoted by the Itar-Tass news agency as saying.

The new pipeline, which will be an expansion of the Baltic Pipeline System, will run 1,000 kilometers and be capable of handling 50 million tons of oil a year. The cost is estimated at US$2.5 billion.

Roughly one third of Russian oil exports is piped through Belarus. Last year, some 80 million tons of Russian crude were shipped via the country to European destinations.

A pricing dispute between the two countries resulted in a brief suspension of oil flow to Belarus and Europe at the start of the year.

The crisis ended on Jan. 12 with a deal in which Russia agreed to cut the duty on oil exports to Belarus, while Minsk promised to share with Moscow a substantial amount of the profits from the refined oil products it sells to Europe.

(Xinhua News Agency February 6, 2007)