China Petrochemical confirms Russian oil

Asia's top oil refiner China Petrochemical Corp has finally closed a deal to buy crude oil from neighbouring Russia South China Morning Post reported.

China Petrochemical, parent of Sinopec <600028><386>, sealed a deal with Russia a month ago, according to a spokesman. However, the Post reported the deal was hindered by lengthy negotiations over railway freight costs.

Under the agreement, China Petrochemical will purchase 2.5 million tonnes of oil every year from Russian oil titan Rosneft, Moscow daily Kommersant said.

The oil will be transported through Mongolia via railway.

Including the 8.9 million tonnes agreed upon with China National Petroleum Corp <135>, Rosneft will be supplying a total of 11.4 million tonnes of oil per year to the Mainland.

Russia ranks as China's fourth-largest crude oil supplier, delivering 15.96 million tones in 2006. This accounts for 11% of China's imports last year.

Russia ranks as the second-largest oil producer worldwide, behind Saudi Arabia, which yielded 480.5 million tonnes in 2006.