Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, May 5 -- China National Petroleum Corp. (CNPC) will officially begin construction of a 992-km pipeline extending from Russia's East Siberia-Pacific Ocean pipeline later this month.
A CNPC executive said the official start of construction on Chinese territory would take place in Mohe, in northeastern Heilongjiang province, with Chinese Vice-Premier Wang Qishan taking part in the May 18 launch ceremony.
The CNPC line will connect with a 64-km line spur that the Russians have agreed to build to the Chinese border from Skovorodino, the end-point of the ESPO's first phase.
The Russian-built spur will extend to the Amur River, which marks the border with China, and CNPC will take up construction of the new pipeline from there to Daqing.
China Central Television Station last month said construction of the line from the border to Daqing will be finished by October 2010, and that it will begin carrying the first 15 million-tonne tranche of Russian crude soon after (OGJ Online, Apr. 28, 2009).
Russia's state-owned pipeline operator OAO Transneft last month began construction of the 64-km spur. Under an agreement signed earlier this year, Russia will send 300 million tonnes of oil to China over a 20-year period.
Meanwhile, Russian oil companies are increasing their planned expenditure for new fields that will eventually supply the ESPO line, according to Vladimir Nazaryev, who heads the territorial department of Russia' s Federal Agency for Subsoil Use.
Nazareyev, who told Russian state media that exploration will be undertaken at 50 "promising" fields, said there is one task: "to increase the raw material base in the zone of the main ESPO oil pipeline."
The ESPO line is to be constructed in two separate phases. In phase one, due to be commissioned by yearend, the capacity will reach 30 million tonnes/year, with 15 million tonnes/year going to China via the 64-km spur.
The remaining 15 million tonnes/year of oil will be piped to Skovorodino, where it will be transferred to rail cars for onward passage to an export terminal at the Port of Kozmino, now under construction on Russia's Pacific Coast.
Once the Russians have completed construction of the ESPO's second phase, now scheduled for 2014, capacity will rise to 80 million tonnes a year, with the majority of the oil bound for markets in Asia Pacific.
Contact Eric Watkins at [email protected].
