Russia may turn off oil pipeline to China

By Yan Pei
0 Comment(s)Print E-mail, August 9, 2011
Adjust font size:

Last month, CIC posted a return of 11.7 percent on its overseas investment in 2010.


Russia may turn off oil pipeline to China over pricing disputes


Russian oil pipeline company Transneft is considering halting oil shipments to China and repaying US$10 billion of loans to China National Petroleum Corporation (CNPC), citing difficulty reaching an agreement on oil pricing issues, reported Tuesday, citing Russian media.

In February 2009, CNPC signed an agreement with Russian oil companies Rosneft and Transneft to lend the firms US$25 billion to build an East Siberia-Pacific Ocean (ESPO) oil pipeline. In return, the Russian companies would supply CNPC with 300 million tons of crude oil over 20 years.

The ESPO pipeline began operating in January. But according to the Russian media, the Chinese have been requiring lower and lower oil prices and paying far less than the contract price to the Russian companies. As a result, Transneft has prepared to turn off the oil pipeline and stop shipping crude to China.

"It makes no difference to us whether we sell the oil to European or Asian countries," quoted a person familiar with the China-Russia oil venture as saying.

"Even if Russian oil pipeline companies file an arbitration claim, the Chinese side could still choose not to act as the court rules and continue to default on payments. In the worst case scenario, Russia could stop exporting oil to China sometime in March 2012," the source added.






China's business press carried the story above on Tuesday.


Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from