Russia and China agreed to conduct a joint feasibility study for a $ 1.7 bn pipeline to carry oil from Siberia to north-eastern China, officials and executives said.
The pipeline accord was signed by officials from the Russian and Chinese governments and executives from Yukos, Transneft, and the China National Petroleum Corp.
The two sides also signed a 25-year oil supply agreement, Yukos said in a statement. Few details were provided, though the counter parties "worked out forms of guarantee for oil deliveries and agreed delivery volumes and a price formula," Yukos said.
The 2,400 km pipeline would run from the Siberian city of Angarsk in the Irkutsk region, where Yukos operates an oil refinery, to Datsin in north-eastern China. The pipeline could be completed as early as 2005 and ship 20 mm tpy of oil to China, rising to 30 mm tpy from 2010, Yukos said.
It seems that the two sides will go their separate ways in the search for financing. "The Chinese side expressed a desire to independently finance construction of the Chinese section of the pipeline," Yukos said.
The signing of the pipeline and oil-delivery accords came on the penultimate day of a state visit by Chinese President Jiang Zemin. Chinese and Russian officials also discussed prospects for building a natural gas pipeline from Russia to China, Russian Energy Minister Igor Yusufov said, the Associated Press reported.
The oil pipeline feasibility study should wind up next July, Yukos said. Russia's share of the cost will be $ 30 mm.
The move forward on the pipeline marks a victory for Yukos, after years of lobbying the Russian government to get behind its plan to build the country's first export pipeline to Asian markets. Yukos currently ships oil from Angarsk to China aboard railroad tankers. The company is also developing a series of eastern Siberian oil fields that are distant from all markets apart from China's.