OREANDA-NEWS. July 18, 2008. TNK-BP will come to China will little oil and subsequently increase its oil export to China, Jonathan Kollek, Vice President, Sales, Trading and Logistics (STL), TNK-BP, said at a briefing, reported the press-centre of TNK-BP.

In three weeks from now, an oil export terminal will be launched in Barabinsk, which will export oil in three possible directions, one of which is China. Apart from that, the company has received a special tariff for rail transportation of oil, which makes export of oil to China profitable.

Currently, TNK-BP exports approximately 150,000 tons of oil every quarter to china through the Atasu–Alashankou oil pipeline. The company hopes to increase its oil export to China. Mr. Kollek said that the oil export terminal in Barabinsk, Novosibirsk Region, supplied with high-quality light oil from the Verkh-Tarskoe field, will start operation at its full capacity.

Oil will be exported from this terminal to three different directions – China, Kazakhstan, and Novorossiisk. According to Mr. Kollek, the company managed to negotiate a special rail transportation tariff, which makes oil export in these three directions economically efficient. The volume of oil export from the terminal will amount to 120,000 tons a month and will be subsequently increased up to 150,000 tons a month. The oil export terminal is on the balance of the Federal Agency for State Reserves (Rosrezerv).

The most profitable route in terms of transportation costs is now the Atasu–Alashankou oil pipeline in Kazakhstan., which is filled with Russian oil from the Omsk–Pavlodar oil pipeline owned by Transneft. Apart from TNK-BP, oil through this pipeline was exported by Gazprom-Oil. In March 2008, the Ministry of Industry and Energy denied Gazprom-Oil’s right to export oil to China until the end of the year. Gazprom-Oil is going to find out the reason for this denial and try to change the decision of the ministry. Natalia Vyalkina, Head of the Mass Media Department of Gazprom-Oil, said to RBK Daily that the issued is not settled yet.

Experts says that fuel consumption in China is growing every year. According to Dmitry Lyutyagin from Veles Capital, the annual fuel demand of China will amount to 346–350 million tons this year and grow up to 522 million tons by 2015 and up to 706 million tons by 2020. This is why Russian oil companies are striving to have their place on this market and diversify the directions of their supplies. Vitaly Kryukov, analyst of CapitalЪ holds that Russian oil companies should sell oil to China and supply oil products to the Kazakh market. In this case, he thinks, abstracting from the internal conflict in the company, TNK-BP could buy an oil refinery in Kazakhstan.

Jonathan Kollek, Vice President, Sales, Trading and Logistics (STL), TNK-BP, said yesterday that the agreement signed by Transneft, TNK-BP, and Rosneft for swap operations of oil supply through the Eastern Siberia – Pacific Ocean oil pipeline will help the oil companies save more than US50 million a year. “Instead of spending US1 billion from the state budget for construction of a pipeline from Omsk to the east, together we can generate additional revenues,” said he. Apart from that, according to Mr. Kollek, the companies will discuss issues of oil quality adjustment and differences in oil transportation costs.