Pipeliners

Sept 28 (AFP)Agence France-Presse - BEIJING - China's first private pipeline for importing oil from Russia is expected to be completed and begin operation next year, state media said Wednesday. The 30-kilometre (20 mile) pipeline, which will link the Chinese city of Heihe in northeast Heilongjiang province and the Russian city of Blagoveshchensk in Siberia, is expected to be completed by next September, the China Daily said. Construction is scheduled to begin this month, earlier media reports said. The 64 million dollar line will pump some three million tonnes of oil annually from Blagoveshchenk to Heihe and could reach its full capacity of five million tons by the year 2008. The oil will be transported to Blagoveshchensk and out of Heihe by train, it said. The volume is a mininiscule amount compared to the more than 300 million tonnes China guzzles a year as the world's second largest oil consumer after the United States but the rapidly industrializing country is eager to get any oil it can. China had earlier pinned its hopes on Russia agreeing to build a much longer and more expensive pipeline to transport oil from Siberia but later faced intense competition from Japan, which offered to pay for much of a pipeline carrying oil to a Pacific coast port. At the end of 2004, Moscow said the pipeline would be built from Taishet to Perevoznaya Bay on Russia's Pacific coast and that a spur would later be built to refineries in China's Daqing, also in Heilongjiang. The China Daily quoted experts as saying that given the lingering uncertainty of where Russia will build the larger pipeline, the construction of this smaller pipeline may be a good way to relieve oil transportation bottlenecks between China and Russia. Most of the investment for the private pipeline is to be paid for by Xinghe Industrial Development, the Chinese operator of the pipeline, while the Moscow-based Russian Lanta Oil Co. will pay for the remainder. "With the geological advantages, the pipeline we are building would be a speedy and convenient shortcut to transport oil from Russia," said Tao Ran, general manager of the Heihe-based Xinghe. The project will include a railway unloading area and oil transfer station in Blagoveshchensk, four pipelines crossing beneath the Heilongjiang River and another oil transfer station and railway loading area in Heihe. The oil will mainly be provided to users in Heilongjiang province.