Russian Prime Minister Vladimir Putin on Monday gave an order finalizing the construction of a new oil pipeline to the Baltic Sea that Russia hopes will reduce its reliance on neighboring states for transit.
"Putin signed an order defining the framework for the design and construction of the Baltic Pipeline System 2 from Unecha to Ust-Luga," a government statement said, quoted by Russian news agencies.
The pipeline is to be built in two stages. A first phase with capacity of 30 million metric tons is expected to be launched in the third quarter 2012 while a second phase will increase capacity to 50 million tons.
The BPS-2 pipeline will carry oil from Unecha in the Bryansk region close to the Ukrainian border to Ust-Luga on the Baltic coast where tankers will carry the oil to its final destination.
The pipeline allows Russia to avoid transit countries such as Ukraine, with which Moscow currently has frosty relations, as well as Belarus.
Russia, the world's second biggest oil producer, has also expressed concern about neighboring states hiking transit costs and even siphoning off energy exports for their own use.