‘Milestone’ pipeline starts delivering Russian crude to China


Russia, the world's biggest producer and exporter of oil, began delivering crude oil to China on 1 January via a newly-built pipeline hailed as a 'milestone'. Until now, Russia had only delivered oil to China by rail.

Russia said it had begun delivering crude at 21.30 GMT on 31 December through the Eastern Siberia-Pacific Ocean Pipeline (ESPO). The planned volume of supplies for the year 2011 stands at 15 million tonnes.

The cost of the pipeline, which links the Siberian city of Skovorodino to the Chinese city of Daqing, is 25 billion dollars (18.7 billion euros) and has been largely supported by Beijing, the Russian press writes.

Russia and China have built independently their sections of the pipeline and they connect in the middle of the Amur river, which forms the border between the Russian Far East and North Eastern China.

Some 2,700 kilometres of pipeline have been built so far. When the second stage of the 4,070 km pipeline is completed in 2013, the pipe will be the world's longest.

"The operation of the China-Russia crude oil pipeline is the start of a new phase in China-Russia energy cooperation," Yao Wei, general manager of the Pipeline Branch of Petro China (PBPC) said at the launch ceremony, quoted by Xinhua. PBPC operates the Chinese section of the pipeline.

Yao noted that the pipeline would improve the nation's energy import structure and promote economic development.

Sergey Tsyplakov, Russia's trade representative in China, said the completion of the pipeline project was a "milestone" in the development of both countries.

The annual amount of oil shipped through the pipeline could increase, depending on the drilling capacity in Russia, said Tsyplakov.

Zhang Shibin, deputy manager of PBPC's Daqing branch, was quoted as saying that although the operation had worked well during a trial period, measures would need to be undertaken to prevent pipes from cracking in spring.

"The pipe will face an important test in May as snow and ice will melt at that time. We will try to ensure its smooth operation," Zhang said.

Oil and gas reserves are unevenly distributed around the globe, and the largest reserves are situated in politically or economically insecure regions such as the Middle East and Russia.

North Sea oil and gas fields have already been exploited beyond their peak and the EU's energy dependency on non-EU countries is expected to climb from 50% in 2000 to 70% in 2030.

Recently, European traders and refiners expressed concerns that Russia's growing oil exports to Asia would not leave enough crude for Europe.

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