Producer seeks Chinese supplies of up to 18 million tons via Kazakhstan
Russia's largest oil producer Rosneft wants to boost its supplies of oil to China through Kazakhstan to as much as 18 million tons (36,000 barrels per day, bpd) per year from around 10 million tons in 2017, three industry sources said on Friday.
"[Rosneft's head Igor] Sechin would like to boost oil supplies to China to 13 million tons per year, with the possibility of a further increase to 18 million tons," a source familiar with Rosneft's plans said, adding that there has been no decision yet at government level.
He didn't specify when the increase was likely to happen.
"This would mean significant oil supplies cuts to Europe," the source added. Two other oil industry sources confirmed the plans.
Russian oil production has been steady at around 10.9 million bpd due to a global pact to reduce total production by around 1.8 million bpd in support of weak oil prices.
Rosneft did not respond to a request for comments.
Russia has steadily increased oil supplies to China over the past years to become the main supplier of oil to the country. This year, Rosneft's total oil supplies to China are set to reach a record high of 40 million tons.
Rosneft's influential head Igor Sechin has in the past said his ambition is for the company's exports to China to reach as much as 1 million bpd.
In August, Russia beat Saudi Arabia in becoming China's top crude oil supplier for six months straight, as independent refiners ramped up purchases and as state-owned refiners bought seaborne shipments from the Russian Far East port of Kozmino.
China's crude oil imports from Russia last month were 4.426 million tons, or about 1.04 million bpd, down 4.5 percent from the same month last year.
Rosneft and the China National Petroleum Corporation agreed in January on an increase of oil supplies via Kazakhstan through to 2023, with total supplies amounting to 91 million tons over a 10-year period.
Kazakhstan's energy ministry said Rosneft has not officially applied for an increase in transit volumes to China yet.
Currently, the supplies are made through the Atasu-Alashankou pipeline, the capacity of which has already been upgraded to 20 million tons, according to the ministry, while between 2 and 3 million tons are used for Kazakstan's own exports to China.
"The necessity of further pipeline expansion would also depend on the level of volumes as well as the time frame of guaranteed supplies, oil transportation tariffs, etc," the ministry said.
