Russia to begin China oil pipeline in 2008

Construction work will begin next year on a much-anticipated pipeline to deliver crude oil directly from Siberia to China, Russia's energy minister said Monday, according to news reports.
Speaking in Beijing, Energy Minister Viktor Khristenko said the first payment for the Chinese branch of a trunk pipeline that links Siberia to Russia's east coast was received in June, paving the way for construction work to begin.

'Construction will begin when the design work is complete,' Khristenko was quoted by the Interfax and RIA Novosti news agencies as saying.

'Under the contact this should be completed within 208 days after the first payment is made by the Chinese side to finance the project,' said Khristenko, who is in Beijing for talks with Chinese officials on energy cooperation.

'The first tranche was received from the Chinese side in June, 2007,' he said.

No decision had yet been made on whether the initial 30-million-tonne annual capacity of the Chinese pipeline would eventually be expanded, Khristenko said, but added that he was 'more optimistic than pessimistic' that this would happen, according to an Interfax report.

China is anxious to secure as much Russian oil as possible to help it increase energy supplies needed to sustain its booming economy and ease its dependency on oil from the volatile Middle East region.

Russia in 2003 opted against a plan to build a single pipeline directly to China, choosing instead a 2,500-mile (4,000-kilometre) route that skirted China and remained entirely inside Russian territory all the way to the Pacific port of Nakhodka opposite Japan.

Since then, the two countries have been discussing building a branch off that main route to China's oil capital Daqing.