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Rosneft offers to boost oil sales to China but no word on pipeline


Russia's biggest oil exporter to China said Friday it is ready to boost supplies by up to 65 percent next year, but there was no word of progress on a planned pipeline to deliver Siberian crude as Russia's prime minister visited Beijing.

State-owned OAO Rosneft is ready to boost exports of crude oil and oil products to China to 140 million barrels next year, up from an expected 85 million barrels this year, said company President Sergey Bogdanchikov. He was traveling with Russian Prime Minister Mikhail Fradkov.

The two sides haven't signed a contract yet on increased supplies, Bogdanchikov said at a news conference.

China is a major customer for Russian oil and gas, and wants to secure increased supplies to fuel its booming economy. Russian oil arrives by rail for now, but Beijing is pushing for access to a planned pipeline to carry Siberian crude to the Pacific.

Russian President Vladimir Putin said during a visit to Beijing in March that Moscow would build a branch pipeline to China. But Russia hasn't committed to a timetable or other details.

Bogdanchikov didn't mention the pipeline and neither government gave any sign that Fradkov and Chinese officials made any progress on the issue during meetings this week.

Rosneft accounts for about 70 percent of Russia's oil exports to China.

China has spent billions of dollars trying to secure foreign energy supplies. A state-owned company built a pipeline to deliver crude from Kazakhstan in Central Asia. Other lines are under construction for gas from Russia and from Turkmenistan, also in Central Asia.

Rosneft and state-owned China National Petroleum Corp. announced a plan this week to jointly build a refinery in China with a capacity of 70 million barrels a year. They also agreed earlier to open a chain of as many as 300 filling stations in China.

Bogdanchikov said Rosneft's increased oil supplies to China next year might be sent by rail through Mongolia or through the Kazakh pipeline.

Bogdanchikov also said Rosneft expects a project on Sakhalin Island in Russia's Pacific Coast to begin production near year, with expected output of 14 million barrels per year.

China is welcome to bid for supplies from that project, Bogdanchikov said.

Also Friday, Russia's Itar-Tass news agency quoted an official in Moscow as saying Russia was ready to build a pipeline to China if Beijing guarantees it will purchase the oil.

"Beijing has understood our logic that it is a purely commercial project and it has the right to exist if there are enough resources and Chinese guarantees for their purchase," the official, who wasn't identified further, was quoted as saying.

The report didn't say what guarantee Moscow would require.

© The Associated Press

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