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. Last Updated: 07/27/2016

RZD to Move 57% More West Siberian Oil by 2007

Itar-TassRussian Railways' construction plan aims to keep crude rolling into China.
Russian Railways, or RZD, will improve its network to boost oil transport by rail from western Siberia eastwards by as much as 57 percent by 2007, as the country's oil pipeline capacity lags production growth.

RZD's construction plan will allow as much as 36 million tons per year of oil (723,000 barrels per day) to be shipped from western Siberia, Russia's main oil-producing region, to the East, up from 23 million tons per year now, the company said Wednesday on its web site.

Russian oil companies are increasing shipments by rail because the nation's pipeline capacity has not kept up with crude production that has increased 50 percent since 1999. China's crude oil imports by rail from Russia may rise by half to 15 million tons next year, helping meet demand that's rising 8 percent per year, Chinese Premier Wen Jiabao said on Monday.

RZD's planned upgrades will help the company save 70 million rubles ($2.5 million) per year on eastern shipments by cutting the time needed to fill railcars for transportation.

Russia will be able to double oil exports to 6 million tons per year through the Naushki station at the border between Russia and Mongolia by 2007, after rail tracks are extended and a new customs station built that will speed border crossings, RZD said Wednesday.

The country ships about a third of its oil to China via Naushki across Mongolia. The other two-thirds goes through the station of Zabaikalsk on the Chinese border.

The capacity of neighboring oil-loading points Sukhovskaya and Suhe outside of Irkutsk in eastern Siberia will be increased as part of the construction plan, RZD said.

About three-fourths of RZD's oil shipments to the East are delivered to the domestic market, to refineries such as Yukos' Angarsk plant near Lake Baikal. Deliveries to the East also go to the Achinsk refinery, controlled by Yukos, and to Rosneft's Komsomolsk plant.

The country raised oil supplies to China by 37 percent in the first two months of this year, compared with the same period last year, after state-owned Rosneft began exports there, stepping in to replace Yukos.

Rosneft ships some oil to China from Yuganskneftegaz after it paid the government in December $9.3 billion for Yugansk, which was Yukos' largest oil-producing subsidiary.