Crude oil began flowing into China from Kazakhstan last Thursday, as the two nations opened a pipeline that is designed eventually to carry 20 million tonnes of oil per year, or 15 percent of Chinas 2005 crude oil imports.
The 960-kilometre pipeline is the first to bring imported oil directly into China, the official Xinhua news agency reported from the far-western border region of Xinjiang, reports Trend.
The first phase of the pipeline will transmit 10 million tonnes of oil per year, with a planned doubling of capacity by 2011 once the pipeline has been extended to about 3,000 kilometres, the agency said.
It has provided a direct link between Kazakhstans rich oil resources and Chinas robust oil consumer market, it quoted Yin Juntai of the China Petroleum Exploration and Development Company as saying. The pipeline was jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company, Kazmunaigaz.
Chinas crude oil imports reached 127 million tonnes, about 40 percent of its total consumption, last year. About a half of the oil imports came from the Middle East, with and only 1.3 million tons from Kazakhstan. The first phase of the pipeline was completed in November 2005 at a cost of USD 700 million. CNPC last year completed the takeover of Canadian-registered PetroKazakhstan in a deal reportedly worth about USD 4.2 billion. CNPC, Chinas largest oil producer, reportedly secured the endorsement of Kazakhstans government by agreeing to sell one-third of PetroKazakhstan to state-owned Kazmunaigaz.