Pipeline to China
January 1, 2011
Oil began flowing in a new pipeline that connects Russia, the world's biggest crude oil exporter, to China, the world's biggest energy consumer, marking a new phase in economic ties between the countries on Saturday.
"We plan to pump 1.3 million tons of oil in January," said Igor Dyomin, a spokesman for Russian oil pipeline monopoly Transneft.
The pipeline, the first of its kind between Russia and China, can carry up to 30 million tons of oil each year, signifying a broader market for Russian oil and a diversification of Chinese energy imports.
Current plans call for the annual supply of 15 million tons (some 300,000 barrels per day) of Russian crude to China through the East Siberia Pacific Ocean pipeline (ESPO) for the next 20 years in exchange for $25 billion (18.7 billion euros) in Chinese loans.
Until now, most of Russia's oil pipeline network was based in western Siberia and delivered oil to Europe. In 2009, about 81 percent of Russian crude oil exports went to Europe and Eurasia with 12 percent headed to Asia.
But with the opening of the new branch of pipeline, Russia will significantly increase its crude oil exports to China and expand its role as an energy supplier to the growing Asian market.
According to the final schedule for crude oil exports and transit, in January-March 2011, Russia will ship 3.68 million metric tons (4.1 million short tons) of oil to China via ESPO.
'Stronger cooperation'
Yao Wei, general manager of the new pipeline - dubbed "Branch PetroChina" - said the pipeline would strengthen Chinese-Russian energy ties.
"The operation of the China-Russia crude oil pipeline is the start of a new phase in China-Russia energy cooperation," Yao said.
Chinese President Hu Jintao and his Russian counterpart Dmitry Medvedev had symbolically opened the pipeline, which stretches for 2,694 kilometers (1,673 miles) on the Russian side and 930 kilometers in China - on September 27.
When ESPO construction finishes in 2014, it will be some 4,700 kilometers long - making it the world's longest oil pipeline.
Author: David Levitz, Matt Zuvela (AFP, dpa, Reuters)
Editor: Sean Sinico