Second China-Russia Crude Oil Pipeline Project Completed

On the morning of November 12, 2017, the Second China-Russia Crude Oil Pipeline Project was completed. The second pipeline starts in the north from Mohe in Heilongjiang Province and runs south to Daqing, with a total pipeline length of 941.8 kilometers.

According to the Vice President of China Petroleum Pipeline Engineering, the second China-Russia crude oil pipeline will be put into use on January 1, 2018. After that, Russian oil transported to China’s northeast by land-based crude oil pipelines will double from 15 million mt per year to 30 million mt per year.

The second China-Russia crude oil pipeline project started in 2013, when PetroChina and Russia signed a 30 million mt per year contract, aiming to fill the annual supply gap caused by the decline of crude oil production in Northeast China.

According to local market players in Northeast China, the increased crude oil volume will mainly be supplied to PetroChina’s refineries, such as PetroChina Dalian Petrochemical, PetroChina Jinxi Petrochemical and PetroChina Liaoyang Petrochemical. As a result, the market share of Saudi Arabia crude oil may be occupied to some degree.

Russia has been exporting more crude oil to China in recent years. In 2015, about 42.43 million mt of crude oil was exported from Russia to China. And the number grew to 52.10 million mt in 2016. During the first nine months, China totally imported about 45 million mt of crude oil from Russia. With the second China-Russia crude oil pipeline put into use, the number is likely to reach a new high in 2018.