Azernews.Az

Potential for exports to neighbour acknowledged as new Siberia oil pipeline completed

MOSCOW – Russian Prime Minister Vladimir Putin yesterday opened a pipeline branch to carry Siberian oil to China and hailed Russia's energy business in China as an important counterweight to its traditional European clients.

Putin was speaking in the town of Skovorodino, the end of the pipeline to the Pacific region, in honour of the completion of a branch that will carry Siberian oil to the Chinese town of Daqing from the end of the year. PetroChina is the importer.

"This is an important project for us because we are starting to diversify sales of our energy resources. To this day the main deliveries are to our European partners. They get around 120-130 million tonnes of our oil today," Putin said on Russian radio.

Uneasy ties with Europe
Russia's relationship with Europe is especially uneasy on the energy front since gas supplies were cut in the dead of winter during a spat with Ukraine, a key transit country, over gas non-payments.

European efforts to diversify energy supplies have been met by Russian declarations of independence from its traditional Western client base, and demand is soaring in China, Moscow's traditional political counterweight to the West.

Putin said when physical deliveries begin, Russia will pump at a rate of 30 million tonnes per year. Further expansion will bring deliveries to 50 million tonnes, he said.

"This is already significant competition for the European route."

US deliveries
Russia inaugurated the East Siberia-Pacific Ocean pipeline in December, giving the world's largest exporter a geographical and advantage over Asia's key Middle Eastern suppliers on deliveries to China, Japan and South Korea.

The new outlet has even helped Russia to increase its deliveries to the United States. Shipments of the ESPO-blend crude move regularly to the US West coast.

ESPO barrels are currently unloaded onto rail cars at Skovorodino and shipped to the Pacific port of Kozmino.

Last week, as the blend was selling at record high prices, China made its second known purchase of ESPO crude.