Dec 12, 2006

Russia's Window to the East

Today, the European Union receives a half of its imported gas and a third of imported oil from Russia, which delivers nearly all of its hydrocarbons exports to Europe. Russia's Asian neighbors, on the other hand, receive by rail only 3% of Russia's oil and no gas. This is about to change, according to RIA Novosti's Yury Alexandrov.

In late 2004, the Russian government issued a resolution on the construction of a controversial 4,000-km East Siberia - Pacific Ocean (ESPO) oil pipeline with a throughput annual capacity of 80 million tons. Out of this amount, up to 30 million tons of oil should be sent along the first leg to Daqing, the oil producing center of China, and some 50 million tons to the Pacific coast (second leg).

During President Vladimir Putin's recent official visit to China, energy giant Gazprom and China National Petroleum Corporation (CNPC) signed an agreement on the annual delivery of 30-40 billion cubic meters of gas to China after 2010, with a possibility of increasing deliveries to 60-80 billion.

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