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Russia: Ministry Touts High-Price Oil to Asia

Oil flowing in the East Siberia Pacific Oil pipeline from 2009 should fetch higher prices than the current standard Urals blend, the Industry and Energy Ministry said Friday.

State oil pipeline monopoly Transneft plans to complete the pipeline — which begins near Irkutsk and ends at Skovorodino, near the Chinese border — by the end of next year. It will supply China and, potentially, other Asian markets.
Most of the oil will come from Rosneft’s Vankor field, and crude from fields operated by TNK-BP and Surgutneftegaz will also be shipped through the pipeline.

“The quality of oil to be transported by the East Siberia Pacific Oil pipeline will be higher than that of Urals blend,” the ministry said in a statement. “Registering it as a new blend will make it possible to sell it at a higher price.”

The crude oil filling the pipeline is easier and cheaper to refine, as it has a lower sulfur content than that usually pumped westward. Blends with a lower sulfur content are commonly referred to as “sweet.”

The government is still considering whether it should register a fifth blend for Russian oil, the ministry said, declining further comment.

Attempts to put a higher price tag on Asian oil supplies were unlikely to scare off potential customers, said Simon Wardell, an oil analyst at Global Insight, an international consulting firm.

Moscow Times

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