Russia set to increase oil supplies to China via Kazakhstan

Russia is ready to increase oil supplies to China via Kazakhstan by 2.5 million tons, Russian Deputy Prime Minister Alexander Novak told reporters.

“This initiative comes from the Chinese side, and we are ready to meet this demand. However, implementing this will require certain technological solutions, particularly involving pipeline infrastructure. Specific measures need to be taken in the area of pipeline transportation. I believe Transneft, our oil pipeline operator, will need to develop a detailed list of the necessary steps. We are currently working on that,” Novak said while speaking about the protocol on amendments to the intergovernmental agreement with China approved by the Russian government.

According to the intergovernmental agreement, the priority route for oil supplies to China is the Skovorodino-Mohe pipeline, but the countries can also determine other transportation routes in addition to the volumes along this route to supply refineries in the western part of China. The new changes suggest increasing the permissible volumes of supplies in other directions to 7-12.5 million tons from 7-10 million tons as tass.com reported.

It is also proposed to extend the delivery period to 5-20 years from the previously specified 5-10 years, starting from January 2014.

Novak added that talks are continuing on Chinese companies entering oil and gas production projects in Russia. "A meeting was held recently. We discussed this. Negotiations will continue. Talks are underway regarding all commercial relations, with ongoing contact between the companies. I hope that additional agreements are reached," he said.

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