Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Rosneft Pledges Oil for Pacific Pipeline

VedomostiRosneft president Sergei Bogdanchikov
TOKYO -- State-owned Rosneft said on Monday that its oilfields could supply at least half the crude for a new Pacific pipeline and that it may sign a retail deal with Japanese trader Marubeni.

Rosneft has oil production assets and a refinery in the Far East and intends to be a major supplier of a huge new pipeline that Russia plans to build in the next few years.

"Japan is interested in receiving our oil," Rosneft president Sergei Bogdanchikov said in Tokyo.

"The first stage of the pipeline, we anticipate, will be built in 2008, and 30 million tons [600,000 barrels of crude oil per day] will be sold on the Pacific Rim, 70 percent of that from Rosneft," Bogdanchikov said.

Russia has not yet set a date for the pipeline's second stage, which when completed will enable oil from remote east Siberian oilfields to reach energy-hungry Asian markets.

Bogdanchikov said Rosneft planned to supply half the final capacity of 80 million tons (1.6 million bpd).

"But today, the times are changing -- it's not just the sale of crude oil that's important. The president of Marubeni and I have been discussing the creation of a venture to sell our oil products on the local market," he said, without elaborating.

Analysts say Russia'a oil producers are increasingly turning to exports of refined oil products such as gasoline and diesel because of record high export duties on crude oil.

Bogdanchikov also said Rosneft planned to build a plant that will use Japanese technology to convert natural gas into auto fuels.

The plant would use gas feedstock from Eastern Siberia, Bogdanchikov told the forum, where he and Gazprom chief executive Alexei Miller were the main speakers. Bogdanchikov didn't say where or when the plant would be built.

"Japanese producers have modern technology in these areas, and without doubt, it could take part" by helping to finance capital-intensive projects in Eastern Siberia, Miller said.

Russia, with about one-quarter of the world's natural gas reserves, is interested in technology that turns gas into dimethyl ether, a clean substitute for diesel.

Rosneft may cooperate with Japanese companies in the making of petrochemicals, Bogdanchikov said.

Russia's natural gas production from Eastern Siberian fields may reach as much 7 billion cubic meters per year, he said, without specifying a time period.

(Reuters, Bloomberg)