Putin launches strategic oil pipeline to China

Last Updated: Sunday, August 29, 2010 - 18:33

Moscow: Prime Minister Vladmir Putin
on Sunday officially launched the Russian section of a strategic
oil pipeline that delivers east Siberian oil to energy-hungry
China, as Moscow stepped up efforts to diversify crude
supplies from Europe to Asia-Pacific.

Putin, who rotated the handle of a valve on the just
completed section of the 4,857 kilometres Eastern Siberia-
Pacific Ocean (ESPO) pipeline pipeline, said, "This is vital
project for us as we diversify the deliveries of our strategic
raw materials.

Thus far, we made the major deliveries to Europe. The
Asia-Pacific region received unsubstantial volumes."

At the beginning of the opening ceremony Putin called
the pipeline a multidimensional project to step up
Moscow-Beijing energy cooperation.

"I am absolutely confident that Russian oil will enter
China this year," Putin said.

The pipeline to the Chinese border opened by Putin in
Skovorodino in the Amur Territory in Russia`s far east is spur
of the main the East Siberia-Pacific Ocean (ESPO) oil
pipeline, which was launched into operation in December 2009
and is designed to pump up to 1.6 million barrels (220,000
tons) of crude per day from Eastern Siberia to the Far East
and then on to China and the Asia-Pacific region.

The Russia-China pipeline spur from the town of
Skovorodino in the Amur region to the city of Daqing in
China`s north-eastern Heilongjiang province is designed to
pump 15 million tons of oil per annum under the loan for oil
deal between Russia`s Rosneft, oil pipeline monopoly Transneft
and China`s state-owned China National Petroleum Corporation
(CNPC).

In line with the contract, the Chinese side provided
the Russian companies with a USD 25-billion loan to construct
the pipeline.

In exchange, the Russian side agreed to pump 15
million tons of oil per year via the pipeline in 2011-2030,
RIA Novosti reported.

In his televised comments Putin called the pipeline
a `multidimensional project` to step up Moscow-Beijing energy
cooperation.

"This is vital project for us as we diversifying
deliveries of our strategic raw materials. So far, we made the
major deliveries to Europe. The Asia-Pacific region received
insignificant volumes," Putin said.

"We will deliver 30 million tons of oil and, in case
of expansion, 50 million tons to the Asia-Pacific Region,"
Putin was quoted as saying by ITAR-TASS.

"The implementation of this project is a crucial
task for Russia and our Chinese friends.

It means stabilisation of supplies and energy balance
for China, and for us it creates entry to new challenging
markets, in this particular case, to the growing market of
China," Putin said.

He recalled that the two sides had to go through
complicated issues, including the route and pricing.

China had wanted the East Siberia pipeline to go
directly to China and from there Russian oil could go for
export to other countries.

However, to avoid the situation of becoming hostage
to single buyer, Moscow extended it to its Pacific coast and
offered China a spur pipeline.

Putin noted that it was now upto China to complete
remaining 930 kilometres of pipeline on its soil to make it
fully operational.

So far Russia had been exporting crude to China via
railway tankers.

PTI



First Published: Sunday, August 29, 2010 - 18:33

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