Russia and China have reached agreements in principle on the construction of a branch from the East Siberia - Pacific Ocean pipeline towards China, President Dmitry Medvedev said in an interview with Chinese journalists ahead of his visit to China, Interfax reports.
"A final stage in the talks on this issue is being held today between Rosneft (RTS: ROSN) and China National Petroleum Corporation (CNPC). We hope all of the main parameters of future cooperation will be negotiated," Medvedev said.
In addition to this, several projects are being implemented in Russia, where "we are cooperating productively with our Chinese partners," he said.
"We also hope that we will create new enterprises to process petroleum products," the Russian president said. "What I mean is plans to build oil refineries, and also to form a chain of filling stations, including in China. All of these projects are in the zone of special attention and are being negotiated by the Russian and Chinese parties," Medvedev said.
The East Siberia - Pacific Ocean (ESPO) oil pipeline is being laid to transport up to 80 million tonnes of oil each year to the prospective Asia-Pacific market. The project to build the first phase of the pipeline envisions the laying of a branch towards China. If the branch
is built, 30 million tonnes of oil will go to China annually.
In mid April, former Deputy Industry and Energy Minister Andrei Dementyev said that the work to design a branch from ESPO to China was nearly over, but the construction would not begin before Russia's oil company Rosneft and CNPC came to terms on the size of shipments and the price for oil.
Initially, the ESPO pipeline was to have been commissioned in late 2008, but the timeframe was adjusted until the last quarter of 2009.