An official with the China National Petroleum Corp. (CNPC), the
company representing China in negotiations with Russia on the
Sino-Russia oil pipeline project, said the company is continuing
its preparations to receive Russian crude.
"We have not yet received an official announcement from the
Russian side," said the official, who declined to be named. "The
Chinese and Russian governments are still keeping in close contact
on the issue."
The comments were in response to yesterday's reports that Russia
and Japan have agreed to build a US$7 billion oil pipeline from
Eastern Siberia to Nakhodka on Russia's Pacific coast, near
Japan.
The proposed route, which starts from Taishet in East Siberia,
was close to a planned Japanese project.
It also suggested building a branch pipeline to Daqing, China's
largest oilfield, according to a Reuters report citing Japanese
government officials.
The new proposal in fact turned down the Chinese offer to build
a direct link from East Siberia's Angarsk to Daqing.
Russia and China signed a non-binding agreement a year ago to
build the trunk line that would allow China to import 700 million
tons of Russian crude over the next 25 years.
If endorsed, it would be the largest-ever trade project between
the two countries.
But the project suffered a setback later on, as some Russian
parties argued that a link to Nakhodka would give Russia access to
more export markets, such as Japan and the United States.
Japan agreed to finance the Nakhodka proposal.
The CNPC official said they would ignore the media reports and
continue working as planned.
Li Fuchuan, a Sino-Russian expert with the Chinese Academy of
Social Science, said the spur line is an acceptable result if
Beijing cannot push the direct link through.
"It is not a bad result if Russia can transport some of crude
via a pipeline and supplement it with oil shipped by rail to
fulfill its commitments," Li said.
Early last month, the CNPC initially agreed to buy 10 million
tons of oil annually from OAO Yukos Oil Co., Russia's largest oil
company, starting in 2006 for six or seven years.
Li, however, doubted whether there were enough reserves in East
Siberia to support the pipeline to Nakhodka.
Russia may have to transport crude from West Siberia to feed the
pipeline, which could affect its crude exports to Europe, Li
said.
The CNPC official tried to play down the significance to China's
oil supply of the oil pipeline, since Beijing is diversifying its
oil imports and searching for oil in overseas countries to satisfy
its needs.
"China's energy supply will not be considerably affected, even
if the project breaks down," said the official.
The official also mentioned that China might build a similar
crude-oil pipeline from Kazakhstan to western Xinjiang Uygur
Autonomous Region.
Once completed, the 1,200-kilometer pipeline would be able to
deliver up to 20 million tons of crude to western China
annually.
Earlier reports said China and Kazakhstan are expected to start
constructing the pipeline this summer.
(China Daily March 23, 2004)