China, Russia Sign Key Siberian Oil Pipeline Deal

MOSCOW (Dow Jones Newswires), October 28, 2008

Russia and China signed a long-awaited deal Tuesday to build a new Siberian oil pipeline to boost energy exports to China during a visit to Moscow by Chinese Prime Minister Wen Jiabao.

The pipeline would run from the East Siberia-Pacific Ocean trunk pipeline, which is still under construction, to the Chinese border, officials said. Capacity is expected to be about 15 million metric tons a year.

The deal was signed by Chinese state oil major CNPC and Russian state pipeline monopoly Transneft in the presence of Russian Prime Minister Vladimir Putin and China's Jiabao.

The agreement is "on the principles of construction and use of the pipeline between Skovorodino and the Chinese border," officials said, without giving further details.

Rosneft, Russia's biggest oil major, currently supplies China with oil by rail. Despite being China's neighbor, Russia is only the fifth-largest supplier of crude oil to the energy-hungry Chinese market.

The branch pipeline is planned to run some 70 kilometers from Skovorodino in Siberia to the Chinese border and will eventually supply the oil hub of Daqing in northern China.

Copyright (c) 2008 Dow Jones & Company, Inc.

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