Kazakhstan pumps Russian crude to China

Jan 11. Upstream

Kazakhstan pumps Russian crude to ChinaKazakhstan pumped 200,000 tonnes of Russian crude to China in December after resuming transit shipments via its pipeline system, ending a stoppage that had lasted more than two years.

The renewed deliveries of Russian oil made a small contribution to the 8% year-on-year increase in crude deliveries to China by the Kazakh pipeline operator Kaztransoil in 2011, the company said in a statement.

Total crude shipments via the Atasu-Alashankou pipeline, which links Kazakhstan with China’s far western region of Xinjiang rose, to 10.89 million tonnes last year from 10.09 million tonnes in 2010, Reuters reported citing data supplied by Kaztransoil.

“In December 2011, shipments of Russian oil were renewed along the Omsk-Pavlodar-Atasu-Alashankou route,” Kaztransoil said.

Reuters cited several unnamed market sources as saying TNK-BP supplied the 200,000 tonnes to China in December.

China stopped taking Russian crude through the Atasu-Alashankou pipeline in October 2009, opting instead to step up deliveries from the Kumkol field in southern Kazakhstan.

Kumkol is a joint venture between Chinese state-owned China National Petroleum Corporation and KazMunaiGas Exploration Production.

Kazakhstan has been short of refined products this year, meaning more domestic crude has been diverted to the country’s refineries and less has been available for export, Reuters reported.

The news agency said industry sources estimated exports of Kumkol crude to China fell 600,000-700,000 tonnes below planned levels in the fourth quarter of 2011 as a result of the crude being diverted to the Pavlodar refinery in Kazakhstan.

China has also started pumping oil into new reserve tanks in its landlocked north-west since September. Cross-border shipments from Kazakhstan have contributed to its swelling reserves, according to Reuters.

It added te Dushanzi strategic reserve in Xinjiang, a 19 million-barrel tank farm, was expected to take in more Kazakh crude in December through an oil swap scheme to send 250,000 tonnes of Russian crude to Pavlodar and 250,000 tonnes of Kazakh crude sent in turn via the Atasu-Alashankou pipeline.

Kazakhstan, the largest ex-Soviet oil producer after Russia, forecasts its crude shipments to China will almost double to 20 million tonnes by 2020, part of an overall plan to raise annual exports by 50% to 110 million tonnes by the same year.

Kaztransoil said its total crude shipments in 2011 rose by 3% year-on-year to 54.02 million tonnes.