Russia will export East Siberian crude oil to Japan for the first time, with a tanker scheduled to set sail Friday, Kyodo News International reports.
The tanker, which will leave the port of Kozmino near the Russian city of Nakhodka, will dock at the Keiyo Sea Berth in Tokyo Bay in early March.
The 100,000 tons of oil, whose bid was won by trading house Mitsui & Co. from Russian oil firm TNK-BP, was purchased by Kyokuto Petroleum Industries Ltd., the Ichihara, Chiba Prefecture-based refiner jointly owned by ExxonMobil (NYSE:XOM) Y.K. and Mitsui Oil Co.
East Siberian crude offers an advantage over a range of Middle East crude due to its lower transportation costs stemming from the geographical proximity of the Kozmino port to Japan. Although Mideast oil takes two to three weeks to be delivered to Japan, the Siberian oil takes only two to three days.
If Japan can procure East Siberian crude in a stable manner in the coming years, it would enable it to diversify sources of its oil needs and save transportation costs. Japan currently depends on the Middle East for 90 percent of its oil needs.
Japan has been importing some crude produced at the Russian Far Eastern island of Sakhalin.
Russia plans to export a further 300,000 tons of crude from the Kozmino port to Japan over the subsequent one month.
Concerning the nature of the shipments, a source close to a major trading house said, ''These transactions signify a sort of trial to check what features the East Siberian crude has.''
Kozmino is the eastern end of the projected 4,800-kilometer pipeline to transport East Siberian oil to the Pacific side.
Since the 2,100-km eastern half of the pipeline has not yet been laid, crude is to be transported to Kozmino by rail until 2014, when Russia says it will complete the pipeline in its entirety.
Siberian oil has been so far exported to such destinations as Hong Kong and South Korea from Kozmino, which the Russian government appears to perceive as a key export base for customers in the Asia-Pacific area.