Pipeliners

05-18-2009 - Upstream OnLine - China has started building a crude oil pipeline to Russia hard on the heels of a loan-for-oil deal struck between the two countries last month, according to reports. Official news agency Xinhua said Chinese vice premier Wang Qishan announced the launch at a ceremony today in Mohe in China's north-east Heilongjiang province, where the transnational pipeline starts. In April agreed to lend $10 billion to Russian oil pipeline monopoly Transneft and another $15 billion to state-run oil producer Rosneft in exchange for 300 million tonnes (2.2 billion barrels) of Russian oil to be transported over the pipeline over 20 years. The planned pipeline will run about 67 kilometres in Russia and 960 kilometres in China to end at the Daqing oilfield. Russia started construction of the pipeline to China in late April. About 15 million tonnes (110 million barrels) of crude every year will be sent to China from Russia upon the completion of the pipeline, which is scheduled for October 2010, and the volume will be increased in the future, a Reuters report said. China currently receives most of its Russian oil supplies via rail.