Russian pipeslines are too small for China

Not clear who will pay for their expansion.

Kommersant has learnt the details of the agreement on the Russian oil exports rise to China. Rosneft has agreed with CNPC on the schedule of supplies, the reconstruction of the Skovorodino-Mokhe oil pipeline and the conditions of the raw materials sale to the future JV oil refinery plant in Tianjin. The parties may prolong the agreement from 25 to 30 years. But the issue of the financing of the expansion of the ESPO and Skovorodino-Mokhe oil pipelines’ expansion stays open. Rosneft has only agreed on the modernization of the latter that will cost at least 5 times less than the necessary expansion of the route pipeline.

Kommersant has learnt the intergovernmental agreement on the cooperation expansion between Russia and China in the sphere of oil trading signed on March 22nd. Among the other conditions it has the schedule of supplies by the priority direction – the Skovorodino – Mokhe oil pipeline: Rosneft, as the authorized organization, from July 1st until December 31st exports up to 800 thousand tons to China, in 2014 – 2 mln tons, 2015-2017 – 5 mln tons a year, 2018 – 2037 – up to 15 mln tons. The parties might prolong the agreement for another 5 years.