Pipeline begins supplying oil from Russia to China

1st January 2011, Comments 0 comments

The first oil pipeline between Russia and China, feted as a mark of growing ties between the world's biggest oil producer and its biggest energy consumer, started operation Saturday, state media said.

Oil began flowing through the pipeline that links Siberia with refineries in the northeastern Chinese city of Daqing at 11:50 am (0350 GMT) after two months of testing, according to the Xinhua news agency.

Chinese President Hu Jintao and his Russian counterpart Dmitry Medvedev had symbolically opened the pipeline -- which stretches for 2,694 kilometres (1,673 miles) on the Russian side and 930 kilometres in China -- on September 27.

It can carry 30 million tons of oil each year and will help China achieve its goal of diversifying energy imports, state media said. Under a 2009 deal China will receive oil for 20 years in exchange for loans worth 25 billion dollars.

China has overtaken the United States as the largest energy consumer, and derives 70 percent of its energy from coal combustion but aims to diversify its sources to include gas, nuclear and renewables such as wind energy.

In October 2009, during a visit to Beijing by Russian prime minister Vladimir Putin, the Russian giant Gazprom and China National Petroleum Company (CNPC) signed a framework agreement providing for deliveries of 70 billion cubic metres of Russian gas to China each year.

But the agreement has so far not come into force because of disagreements between the two emerging giants over gas prices.

© 2011 AFP

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