China and Russia
have moved closer to a final agreement that would see Russian crude oil
supplied to a refinery in the Chinese port city of Tianjin.
The deal would boost Russian supplies to China by more than a
third and is in line with a commitment earlier this month by the two
sides to increase deliveries from the world's second-largest oil
producer to the second-largest consumer.
Russia's
state-controlled OAO Rosneft (ROSN.RS) could ship as much as 9 million
metric tons a year, or 180,000 barrels a day, of crude to the planned
joint-venture refinery, the Interfax and Prime news agencies reported
Monday, citing Deputy Prime Minister Arkady Dvorkovich. Contracts would
be signed in the coming months, he said, according to the reports.
Igor Sechin, the chief executive of Rosneft, Russia's
largest oil producer, visited China last week to discuss increasing
crude deliveries from the current level of 15 million tons a year.
China's overall imports of Russian crude rose 23% to 24.3 million tons
in 2012, in part due to a new Russia-China pipeline that came online in January 2011.
Chinese Vice Premier Wang Qishan also said Monday that the two
countries had agreed in principle to increase the supply of Russian
oil, without providing further details, according to an account on the
government web portal at Gov.cn.
The two sides should negotiate quickly toward signing a final agreement for the Tianjin refinery soon, Mr. Wang said.
In 2010, Rosneft and its counterpart China National Petroleum
Corp. held a groundbreaking ceremony for the refinery, which they said
would require total investment of 30 billion yuan ($4.8 billion), with
target throughput of 13 million tons of crude a year. Four million tons
would be supplied by state-owned CNPC, the JV partners said at the time.
Reuters cited unidentified industry sources earlier this month
as saying Rosneft could receive a loan of up to $30 billion from China
as part of a deal that would see deliveries doubled.
Rosneft denied it was in talks on a loan from China.
In 2009, China extended $25 billion in credit to Rosneft and
Russian pipeline operator OAO Transneft as part of the agreement for the
current crude supplies.
China and Russia
have repeatedly failed to reach a final agreement on a separate deal,
agreed to in principle two years ago, involving two massive pipelines to
supply Chinese cities with Russian gas. The impasse is due to a
disagreement on pricing.