The Associated Press November 2, 2010, 2:47AM ET

Russia begins oil pipeline shipments to China

Russia's largest oil company, Rosneft, says it has begun trial shipments of crude oil to northeast China via a pipeline that will eventually run 4,000 kilometers (2,500 miles) from East Siberia to the Pacific.

The oil is being shipped via a branch of the pipeline that runs from the Russian city of Skovorodino to Daqing, a Chinese oil production base, Rosneft said in a notice on its website. The first crude shipment was due to arrive early Tuesday in Mohe, the terminal at China's border.

The pipeline is expected to provide 15 million tons of crude oil a year, beginning next year, though it has the capacity to handle twice that amount, the official Xinhua News Agency reported. China will import 250,000 tons in November and 300,000 tons from Rosneft in December, it said.

Russia is the world's biggest energy producer and China is the world's largest energy consumer, having overtaken the United States last year. Although Europe remains Russia's largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.

During a visit by Russian Prime Minister Vladimir Putin to Beijing late last year, Russia signed dozens of commercial pacts worth $3.5 billion. It also set the framework for a separate, multibillion-dollar agreement to build two natural gas pipelines to China from gas fields in Russia's Far East that would provide supplies almost matching China's current consumption.


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