Construction on the second phase of Russia's Pacific Coast pipeline, initially set to begin in March 2008, probably will be delayed, the head of the Russian Natural Resources Ministry's geological and mineral resources department, Sergei Fyodorov, said April 10. Fyodorov's warning is a classic case of understatement.

The pipeline, also called Eastern Siberia-Pacific Ocean (ESPO), undoubtedly will change regional dynamics when it finally becomes operational. The Russians have been pushing some version of a pipeline linking Siberia with the Asia/Pacific region for well over a decade, all the while seeking someone to foot the bill. And many nations are indeed interested in Russian oil.

The Japanese, Koreans, Chinese and Taiwanese are largely dependent on the politically volatile Middle East for the bulk of their imported oil, and would love a substitute supplier. They would also dearly love a competitor for their Middle Eastern suppliers. Persian Gulf suppliers regularly take advantage of Asia's dependence by adding a surcharge of up to $5 a barrel on shipments to Asia. The Asians hope Russian supplies would reduce this "Asian premium." The U.S. West Coast also could become an occasional purchaser of Russian crude.

Such a line would also regenerate Russian political fortunes in the Pacific. The end of the Cold War in essence meant the end of Russian influence in Northeast Asia. Exporting 1.6 million barrels per day of crude to the region would rejuvenate Russia's regional standing.

But a Pacific line will not come easily. Most of the terrain is inhospitable to humans and largely unpopulated, so the pipe is threading its way through rough terrain in virgin, mountainous lands. The first phase alone, currently under construction, is expected to cost more $11 billion. And that phase will extend the project only as far as Skovorodino, in Russia's Amur region. It will take another phase -- and likely another $11 billion or more -- to bring Russia's Siberian oil pipe to the Pacific. In 2006, the Kremlin finally accepted that no one was going make such a huge investment in a project the government insisted on owning. So it financed the project itself.

Now, logistical problems are bubbling up. While Russia is pressed for more export infrastructure, the Pacific line begins in an area where very little oil is produced. (All of Russia's surplus production is farther west.) No one wanted to invest in exploration and production in hostile Siberian terrain until there was a functioning pipe.

Sergei Grigoryev, vice president of Russia's state-owned pipeline monopoly, Transneft, now says his firm will not begin construction on the second phase until the first phase is filled to the brim with crude. Events are extremely unlikely to progress according to Grigoryev's plan. Skovorodino, population 11,000, is basically in the middle of nowhere; the only possible export market from there would be to China, which would first require unloading any first-phase oil onto railcars for another 600-mile journey to the Chinese oil city of Daqing. (China has no plans to build a connecting pipeline.) But the Chinese city probably could not handle an additional million barrels of daily oil.

If the Russians wait for the Chinese to build a link to Skovorodino, the first phase will yield nothing but a white elephant in the wilderness. This means that unless the Kremlin is willing simply to waste its first $11 billion, it will need to pay that much again to complete the line -- and likely spend twice that much again to help fund exploration and production efforts in a region where the foot of man never really has tread.

All in all, ESPO likely will prove to be a $40 billion to $50 billion investment, and one that -- aside from some incidental rail shipments to China -- will not see its first sale until the entire project is completed, likely after 2015. Russia will get its project, and with it, influence anew in Asia. But not anytime soon, and not on the cheap.