Russia plans to transport 30 million tons of crude oil to China per year through the Skovorodino-Mohe pipeline from January 2018.
Rosneft Oil, the biggest oil firm in Russia, said on October 11 that it had reached an agreement with Transneft on major projects including supplying more crude oil to China and under therms of the agrement, it planned to transport 30 million tons of crude oil to China per year through the Skovorodino-Mohe pipeline from January 2018 and the term would be 20 years. It transported 15 million tons of crude oil to the nation per year through the pipeline currently and planned to raise the figure to 20 million tons from January 2015 and 30 million tons from January 2018.
A top executive with China National Petroleum Corp. (CNPC), the biggest oil and gas producer in the Chinese mainland, said in an interview on October 14 that Russia had signed an agreement within China on supplying more crude oil prior to this and this was the first time for the Russian oil firm to unveil the details. It always expected the ESPO crude oil sold in the Far East region to become the benchmark one, but failed to achieve the goal due to poor performance of the pipeline there. The supply of such crude oil would rise and as long as the clients in markets including China, Japan and South Korea were willing to, it would achieve the goal.
The CNPC executive reiterated that actually, it had become a focal point how the crude oil would be priced. And for various reasons, crude oil buyers in the Far East region including China, Japan and South Korea had to receive a per-barrel premium of USD 1 to USD 3. And in order to change the situation, future exchanges in markets including Singapore and Japan once planned to launch a self-owned crude oil futures variety in a bid to have a bigger say in the pricing of crude oil globally. However, they failed to succeed for various reasons at the end and a major reason was that there was a shortage in benchmark crude oil varieties.
He added that provided that the ESPO crude oil became a benchmark one in the Far East region, Russia would benefit much. On the one hand, its export price of crude oil would not be controlled by the US and British capital. And on the other hand, the influence of its currency in the international market would rise sharply.