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Russia to Export Oil Through China
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China and Russia have agreed to join their efforts in building an oil pipeline from Irkutsk of Russia to Daqing of northeast China's Heilongjiang Province, Pravda of Russia reported recently.

Through this pipeline, Russian oil will be exported to China and other Asian countries.

Though abounding with oil reserve, Siberia has difficulty in exporting its oil and further developing its petroleum industry. Despite the low price of Russian oil, the high transport cost make foreign companies turn to the Gulf Region for oil. Following China's entry into the WTO and the coming up restructuring of its oil industry, Russian oil dealers find the opportunity for them to expand their exporting business.

Currently, each side of the new deal is verifying the plan and reviewing problems concerning technology and investment. Sources from Russia say that a formal contract will possibly be signed in December next year.

According to the agreement, Yukos Oil Company, the second largest of its kind in Russia, will invest US$150 million to build the 1,500 km section of the pipeline in Russia, while its Chinese partner will inject US$50 million to construct the 760 km Chinese section. Through the pipeline, which is expected to begin trial operation in 2005, 20 million tons of oil will be sent to China annually. By 2010, its annual transporting capacity will be raised to 30 million tons.

(china.org.cn by Tang Fuchun November 30, 2002)

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