REPORT: China is Diversifying Supply Chain of Oil and Gas

REPORT: China is Diversifying Supply Chain of Oil and Gas

Beijing : China | Jun 24, 2013 at 10:23 PM PDT
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The Russia-China oil pipeline will connect the world's biggest gas producer with the world's largest energy consumer

China National Petroleum Corporation (CNPC) on June 24 published details of a long-term trade agreement to increase the supply of Russian crude oil.

This is the largest contract in China's foreign trade in the raw material.

In the future, CNPC plans to increase imports of crude oil from Russia to 46.1 million tons per year, which amount to about one tenth of the total oil consumption in China in 2012.

According to the contract of supply, RF-based transportation of raw materials for China -Russian oil pipeline (eastern line) of 15 million tons per year will gradually increase imports, it is estimated that by 2018, the volume will reach 30 million tons per year. Contract duration - 25 years, renewable for 5 years.

It is also assumed that since January 1, 2014 will begin delivery of raw materials through the Sino-Kazakhstan oil pipeline (western line), the volume will reach 7 million tons a year, the term of the contract for the supply of Russian oil to China through the Kazakh section of the pipeline - 5 years with the possibility of renewal for 5 years.

The Russian side has promised that after the establishment of the Sino-Russian refinery and petrochemical plant in Tianjin, it will supply him with 9.1 million tons of crude oil per year. director of the Research Center of oil resources China Petroleum University Professor Dong Syuchen believes that there is a change in the structure of international energy markets.

Exports of energy over a long period of time is an important international economic strategy of Russia. As the demand for Russian oil in Europe has fallen somewhat, Russia started to move the center of gravity in the Asia Pacific region.

And China is the most active consumer of energy in the Asia-Pacific region and even the world.

The deepening of bilateral cooperation meets the needs of the countries. Second, a few years ago, China and Russia have built a pipeline that allowed the parties to carry out large-scale cooperation in the oil and gas industry. According to Dun Syuychena signed contract is beneficial to both countries.

As for China, the future economic development of the country will continue to be associated with fossil fuels at the heart of the oil. Despite the fact that China is committed to the increased production of oil and gas resources, in general it is still not possible to satisfy the needs of the country, the import of energy resources has become an important part of China's strategy.

A build-up of imports of oil and gas from Russia, of course, diversifying the supply chain of raw materials, which will benefit the energy security of the state.

Among the strategic energy channels in the four directions, the north will be particularly important due to the deepening of Sino-Russian energy cooperation.

However, in Russia should also realize diversification of the energy market for energy security country. Close cooperation with China means that Russia has found a stable energy market.

In this regard, the two-way interaction is certainly a mutually beneficial and win-win.

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China Energy Sources
Energy sources in China are diversifying according to latest reports.
fibonnaci is based in Guelph, Ontario, Canada, and is a Reporter on Allvoices.
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