CNPC to spend big on pipeline

China National Petroleum Corporation (CNPC) said it may invest up to 8 billion yuan (US$1.2 billion) on an oil pipeline to import crude oil from Russia.

The 965-kilometre Chinese mainland section of a Sino-Russian crude oil pipeline will be built between this year and 2010, according to the China Planned Projects website.

The website is partly owned by the Investment Research Institute of top economic planner, the National Development and Reform Commission.

CNPC has signed an agreement with Russia's Transneft to build a branch pipeline off Russia's transpacific pipeline to export oil to the mainland.

The pipeline will pump oil from fields in East Siberia to the Russian Pacific seaboard for exports to nations such as Japan and the US, as part of Russia's efforts to diversify oil sales.

CNPC would invest in the construction of the branch pipeline, Andrei Dementiev, deputy head of Russia's Ministry of Energy and Industry, was quoted by a report as saying.

Russian Industry and Energy Minister Viktor Khristenko said on 10 July that the branch would have the capacity to supply 15 million tonnes of oil a year initially, eventually rising to 30 million tonnes.

The branch pipeline had been under negotiations for 13 years and was almost concluded in 2003 before Japan lobbied the Russian government to give priority to the eastern seaboard route, the South China Morning Post newspaper reported.