Tnk-Bp Hopes to Start Direct Oil Supplies to China

LONDON. Feb 13 (Interfax) – Russian-British oil company TNK(RTS: TNKO)- is currently supplying oil to China under swap agreements, but hopes to receive a quota for direct supplies this year, TNK-BP Vice President for Sales Anthony Considine told journalists in London.

He said that the company wants to supply oil to China, but currently does this through swaps with Kazakh oil companies through the Atasu-Alashankou pipeline. He said that in annual terms these supplies amount to about 1 million tonnes of oil.

At the same time Considine said that the company hopes to receive a quota from Transneft (RTS: TRNF) to carry out direct supplies (through the Omsk-Pavlodar pipeline to the Atasu-Alashankou pipe), and to start these in 2007.

TNK-BP Management Vice President Jonathan Kollek said earlier that TNK-BP had signed a contract to supply oil to CNPC from January 2007.

In addition, earlier TNK-BP provided 400,000 tonnes technical oil to fill the Atasu-Alashankou pipe, which started to work last year.

Russian oil is needed to dilute Kazakh oil, of which 180,000- 200,000 tonnes a month is sent along the oil pipeline, to prevent it from freezing in winter, Kollek said.

Rosneft (RTS: ROSN) has also announced plans to start supplies of 1.5 million tonnes of oil to China along this route. Rosneft currently supplies 8.8 million tonnes of oil to China per year by rail.

Transneft President Semyon Vainshtok has not ruled out that transportation of Russian oil through the Atasu-Alashankou pipeline in 2007 might amount to 7 million tonnes.

“I suppose that 7 million tonnes of Russian oil will possibly be transported through Kazakhstan, through the Atasu-Alashankou pipeline. This will depend on how much they can deal with their own viscosity,” he said.

The pipeline is currently being filled with oil from the Kumkol field, which has high paraffin content. It is proposed that Russian oil may reduce the viscosity of this oil and this would make it easier to transport, especially in the winter period, when viscosity increases, making it necessary to heat the oil in order to transport it.

(c) 2007 Daily News Bulletin; Moscow – English. Provided by ProQuest Information and Learning. All rights Reserved.