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Russia to Send More Oil to China BUSINESS ASIA By Bloomberg

Posted on: Friday, 17 March 2006, 15:00 CST

By Rob Delaney

Russia aims to increase crude oil exports 25 percent this year by shipping more oil to China by rail, the nation's ambassador to China said Thursday. Deliveries may rise to 15 million metric tons annually, or about 301,000 barrels a day, Ambassador Sergei Razov said. The oil is worth more than $6.5 billion at current prices. President Vladimir Putin will visit Beijing next week to discuss an $11.5 billion project to increase oil exports by building a pipeline from Siberia to China's border. The venture will enable Russian exporters like Rosneft to increase their share of the world's fastest-growing market.

"This is a large-scale project of great vision, which requires a lot of investment," Razov said. "It requires a full and thorough investigation." Talks have started between PetroChina and Russia Crude Oil Transportation on extending a Siberian pipeline, Razov said. "The two sides will discuss this further" during Putin's visit, Razov said.

The Russian state pipeline operator Transneft plans to build a $11.5 billion oil link across Siberia to the Pacific Ocean to bolster supplies to Asia Pacific users. The Russian industry and energy minister, Viktor Khristenko, said last month that Russia wanted oil exports to Asia Pacific to reach a third of total crude exports by 2020, up from about 3 percent now.

Russia shipped 188,000 barrels of oil daily to China in the first two months of 2006, 31 percent more than year earlier, Interfax reported Tuesday.

Russian Railways, Russia's rail monopoly, is laying new track and upgrading stations to lift deliveries to China to as much as 301,000 barrels a day by the end of the year, Interfax said, citing a statement by Eastern-Siberian Railways.

China last year imported more than 88 million barrels of crude oil from Russia, Foreign Minister Li Zhaoxing of China said March 7.

In 2004, Russia was the world's second-largest oil producer, pumping 9.3 million barrels a day, compared with Saudi Arabia's 10.6 million barrels, according to BP's Annual Statistical Review of World Energy.

Gazprom, Russia's monopoly natural gas supplier, said in September that it was in talks about supplying gas to China National Petroleum, the parent of PetroChina.

Source: International Herald Tribune

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