Russia's Rosneft has signed a 10-year deal with China's state-owned CNPC to continue supplying 200,000 b/d of crude to China through Kazakhstan, extending an existing supply deal that expires at the end of next year.
Shipments under the new deal will flow through Kazakhstan's Atasu-Alashankou pipeline to refineries in northwest China. The pipeline has 400,000 b/d of capacity, but Kazakhstan only uses 20,000 b/d of that for exports to China.
Rosneft estimates that it has covered 7pc of Chinese crude demand in the last few years. As well as supplying China via the Atasu-Alashankou pipeline in Kazakhstan, Rosneft's shipments to China include direct supplies via the ESPO pipeline and seaborne exports from the Russian far eastern port of Kozmino. The firm said it has exported 442mn t of crude to China since 2005.
Today's deal was signed during President Vladimir Putin's visit to Beijing to meet his Chinese counterpart Xi Jinping. Russia's state-controlled Gazprom has also signed a gas supply agreement with CNPC today. The deals come against a background of heightened tensions between Russia and the US and Europe over the Ukraine crisis and calls from senior EU officials for member states to reduce their dependence on Russian energy supplies.
