CHINESE OIL major PetroChina plans to conclude a $1.7-billion pipeline deal with Russia’s Yukos shortly. PetroChina and Yukos are in talks to build the 2,400-km long Angarsk-Daqing pipeline to channel crude oil from Siberia to Daqing from 2005.
Reports from China suggest that PetroChina would take an upstream stake in the Siberian Tomskneft and Yurubchenskoye fields, where BP could emerge as a strategic partner to complement the oil major’s interest in the Baku-Tblisi-Ceyhan pipeline.
The pipeline is intended to deliver a rate of return of 15% and boost PetroChina’s oil sales volume and earnings before interests, taxes, depreciation, and amortization by 8% and 6% in 2005, respectively. Yukos is Russia’s second-largest producer, and supplies the bulk of China’s crude imports from Russia, which increased by 65% year-on-year to 2.27 million metric tons in the first 10 months of 2002.