Rosneft Looking to Supply another 3 mln Tonnes of Oil a Year to China via Kazakhstan

Rosneft has asked Transneft about the possibility of providing for the delivery of an extra 3 million tonnes of oil per year to China via Kazakhstan. 

Rosneft currently exports 10 million tonnes of oil a year to China via Kazakhstan. 

Rosneft CEO Igor Sechin said at the beginning of September that his company would supply about 40 million tonnes of oil to China in 2017. "We are confident that there is potential for growth," Sechin said. "Rosneft is in talks to increase supplies, both with traditional partners and new ones. We are allowing for an increase in supplies via Kazakhstan," Sechin said. He pointed out that a five-year oil supply contract was recently signed with Chinese CEFC 

"There was a request from Rosneft about increasing pumping volumes by another 3 million tonnes. This request is being considered," he said, adding that this oil would be pumped via Kazakhstan.  

Russia supplies 15 million tonnes of oil a year to China on the Skovorodino-Mohe pipeline under agreements with CNPC. Rosneft and Transneft concluded those 20-year agreements in 2009 and the supplies began on January 1, 2011. In exchange for the supply deal, Rosneft received a loan of $15 billion from Chinese banks and Transneft - $10 billion. 

It was expected that additional supplies on that route would total 15 million tonnes a year beginning in 2018. Russia is upgrading capacity on the Russian segment of the pipeline and China is upgrading the Chinese segment.  

However, China asked Russia to supply less oil than planned in 2018 on the Skovorodino-Mohe pipeline, with the remainder being shipped through the port of Kozmino. China said delays in completing the reconstruction of the refinery in China that is to receive the pipeline oil necessitated the change. 

Russia acceded to the request. "A minimum of 1.5 million tonnes of oil will be supplied via Kozmino, although probably more: 1.7 million tonnes will definitely be possible, according to the estimates. Right now, we are seeing whether the volume might be increased even more. The remaining volume, accordingly, via pipeline," Deputy Prime Minister Arkady Dvorkovich said following a meeting of the Russian-Chinese intergovernmental commission on energy cooperation in the middle of September. 

Beginning in 2019, all 30 million tonnes of oil will be supplied on the Skovorodino-Mohe spur of the Eastern Siberia-Pacific Ocean (ESPO) pipeline, he said. 

Read full article at: Interfax