Moscow: Russia, the world's top crude exporter, said it had begun scheduled oil shipments to China via an East Siberian link yesterday as the Kremlin cements ties with its energy-hungry neighbour.

So far, Russia's 50,000km oil pipeline network has been concentrated in West Siberia and run toward Europe.

With the commissioning of the Eastern Siberia — Pacific Ocean pipeline (ESPO), Moscow is carving out a large chunk of the world's second-largest energy consumers' market.

"The shipments started at 0030 (2130 GMT on Friday).

"We plan to pump 1.3 million tonnes of oil in January," said Igor Dyomin, a spokesman for Russian oil pipeline monopoly Transneft.

Final schedule

According to the final schedule for crude oil exports and transit, in January-March 2011, Russia will ship 3.68 million tonnes of oil to China via ESPO.

An annual plan envisages the supply of 15 million tonnes (300,000 barrels per day). Many oil market participants expected it would effectively double Russian sales to China, which totalled 12.8 million tonnes (308,000 bpd) in the first 10 months of last year.

Transneft started to ship the barrels along the first stage of the pipeline, which runs in a 2,757km arch above Lake Baikal. So far the oil had been transported only by rail to the Pacific port of Kozmino.

Yesterday, the crude flowed to Daqing in China from Russia's Skovorodino via the pipeline.

Infrastructure projects

When the 4,070-km the pipeline's second stage is finished in 2013, it will be the world's longest. At a cost of $25 billion (Dh91.95 billion), it dwarfs all other infrastructure projects in post-Soviet Russia.

Russian state oil firm Rosneft has been sending oil to China by rail ever since it bought the biggest unit of defunct oil giant Yukos six years ago.

The purchase was facilitated by a $6 billion loan from China, which effectively prepaid $17 per barrel for 48.4 million tonnes of oil.

That contract ran out this year, and Rosneft decided not to extend it, citing the low selling price.

Energy market: new direction

The new oil pipeline between Russia and China "could influence the shape of the global energy market and change the flow of global energy supply and consumption," Sergei Luzyanin, deputy director of Moscow's Far East Institute, told Chinese newspaper People's Daily.

"Russia turns its head from West to East," he said. "This had happened the first time in decades. Europe cannot compete with China in terms of investments into Russian economy," Luzyanin said.

China, the world's biggest emerging economy, relied on imports to meet its 388 million tonnes of crude oil consumption needs in 2009, according to official data. A significant portion of China's demand is delivered by GCC countries.