Pipeliners

05.09.2005 MosNews - China will start construction of the country's first private pipeline to import oil from Russia as early as this month, the China Securities Journal reported on Monday, Sept. 5. The newspaper said the 30-kilometer pipeline, with an estimated investment of 520 million yuan (about $65 million), will link railway lines between the northeastern city of Heihe in China's Heilongjiang province and Siberia's Blagoveshchensk in Russia. It said its first stage transmission capacity will reach three million tons annually. "We aim to provide a conduit for companies that have oil import and export rights...it's just like building a highway where we collect the tolls," Hao Chunli, deputy general manager of Xinghe Industrial Development Co Ltd, the Chinese operator of the pipeline, was quoted by the newspaper as saying. Xinghe Industrial will invest 342.33 million yuan ($43 million) in the pipeline, while the Russian partner will contribute the remaining 170 million yuan ($22 million) the Heihe municipal government said on its website. The newspaper said the pipeline begins in Blagoveshchensk where there will be an oil storage facility with a capacity of 24,000 tons, and ends at Heihe where an oil storage facility with a capacity of 60,000 tons will be built. Current oil trade between China and Russia relies mainly on railway transport, but it is hampered by the fact that Russian railroads need modernization and there is an acute shortage in the oil terminal capacity. MosNews has already reported that Russian oil exports to China are threatened by railroad oil terminal bottlenecks, and that neither the oil companies nor the transportation monopoly Russian Railways are willing to invest funds for an upgrade.