January 2011
Sun Mon Tue Wed Thu Fri Sat
« Dec   Feb »

Day January 1, 2011

Russia pumps oil to China

Dec. 31 (Bloomberg) — Russia will start its first oil
pipeline to China at midnight, increasing crude exports to the
world’s largest energy consumer. OAO Rosneft, Russia’s largest oil
producer, and state-run pipeline operator OAO Transneft will sell
China 15 million metric tons (110 million barrels) a year for 20
years through the East Siberia Pacific Ocean pipeline, known as
ESPO, after China provided the companies $25 billion in oil-backed
loans to finance construction and development of deposits. The OAO
Transneft Logo Russia currently supplies crude to China by rail and
shipped 1.06 million tons in November, making it the Asian
country’s seventh-largest supplier, according to Chinese customs
statistics on Bloomberg. Prime Minister Vladimir Putin has said the
$26 billion project will diversify the delivery of Russia’s natural
resources beyond Europe. Russia also hopes the pipeline will unlock
millions of barrels of resources trapped in remote deposits along
its path. “Asian oil buyers clearly gained,” Ed Chow, a senior
fellow at the Center for Strategic & International Studies,
said by e-mail. China won’t pay a premium for the crude, and the
cost of the pipe will be distributed among Russian oil producers,
he said. The ESPO pipeline when completed in 2014 will span about
4,700 kilometers (2,900 miles), longer than the distance from
London to Tehran. It will carry oil from Taishet, beyond the west
Siberian basin where most of Russia’s oil is produced, to Russia’s
Pacific port of Kozmino. Daqing Spur Transneft completed
construction of about half the pipe’s length, to Skovorodino in
eastern Siberia in 2009. From there a 1,024 kilometer spur extends
to Daqing in northeast China.