Oil and gas cooperation between CNPC and Russia's oil sector began since 2003. CNPC also provides oilfield services and engineering and construction services in Russia.
Oil and Gas Operations
Oilfield Services, Engineering and Construction
Since 2003, CNPC has signed agreements with Sakhalin Energy, Lukoil and Rosneft in the fields of oil trade, petroleum exploration and development, and oilfield service and engineering.
In October 2006, CNPC and Rosneft jointly established Vostok Energy Ltd., in which CNPC has a 49% stake. In August 2007, Vostok Energy Ltd. won an auction for licenses to explore for oil and gas in two eastern Siberian blocks in North Irkutsk Province of Russia — Verkhneichersky and West Chonsky. We completed drilling and encountered oil and gas shows in exploration well West Chonsky-1 in 2010.
Cooperation in the oil and gas business is deepening between China and Russia.
In 2008, CNPC and Transneft signed an agreement in principle on the construction and operation of a crude pipeline from Skovorodino in Russia to Mohe at the Sino-Russian border. According to the agreement, China and Russia will jointly construct and operate the Russia-China Crude Pipeline based on the Phase I project of Russia's Far East Pipeline.
In 2009, CNPC signed “The Contract on Construction and Operation of the Crude Oil Pipeline from Skovorodino to the Russia-China Border” with Transneft, as well as agreements with Rosneft and Transneft respectively for long-term crude trade. Under the agreements, Russia will supply 15 million tons of crude to China each of the 20 years of the contract term. Construction of the Russian section and Chinese section (Mohe-Daqing) began in April and May, 2009, respectively.
In 2010, the Russia-China Crude Pipeline became operational, symbolizing a new era of our energy cooperation with Russia. We inked a general agreement with Transneft over the operation of the Russia-China Crude Pipeline that stretches from Russia's Skovorodino station to China's Mohe station, a framework agreement with Gazprom to import natural gas to China, an agreement with Rosneft on extending oil supply to the Russia-China Crude Pipeline, and an agreement with LUKoil on expanding strategic cooperation. Our 13 Mt/a joint veture refinery with Rosneft was inaugurated in Binhai New District of Tianjin in September 2010.
CNPC provides engineering and oilfield service, including geophysical prospecting and pipeline construction. In 2006, CNPC provided 3D seismic data acquisition services for TNK-BP. In 2010, we signed a sales and technical service contract of MCI5570 micro-resistivity scanning instrument with Russia’s TNG. This was the first export of Chinese-made equipment of this kind into the Russian well logging market. Additionally, Baoji Petroleum Steel Pipe Company Limited, our subsidiary, won a contract to supply pipes to the Russian East Siberia – Pacific Pipeline.
In 2007, in the construction of Russian's Far-East Crude Pipeline project, CNPC installed the 170km-long trunk pipeline in the eastern section from Aldan to Tynda, with the application of various welding techniques. The welding of the main part of the pipeline has been completed in June 2008.
Russia-China Crude Pipeline
The pipeline starts at Skovorodino off-take station in Russia and ends at Daqing terminal station in China. With a designed annual capacity of 15 million tons, the pipeline is about 1,000 kilometers long, including 63.4 kilometers in Russia and 933 kilometers in China.
Construction of the Russian section and Chinese section (Mohe-Daqing) began in April and May, 2009, respectively. The Mohe-Daqing section was built in such a complex environment that constructors were technically challenged by the permanently frozen soil in extremely cold zones, and a 1,150m-long crossing over Heilongjiang River, the boundary river between Russia and China. To install the pipeline, CNPC's pipeline constructors mastered and implemented innovative new construction techniques such as “pipeline construction in multi-year frozen soil areas”, "construction on forest wetlands", “construction in swamps of permanently frozen soil”, and conscientiously minimized the operation zones to maximally protect the nature in the protection zone while keeping to the construction schedule.
We also conducted a crossing for the 1,150m-long main pipeline to run across the Heilongjiang River. To minimize the environmental impact during crossing, the two sides reached a consensus on using directional drilling methods and adopting opposite-direction drilling on both banks simultaneously. Most notably, we used fibertec protection technology for the Heilongjiang River crossing, which kept the anticorrosion layer on the pipeline from being damaged by the gravel layer, and ensured a more than 50-year service life for the pipeline used in the crossing.
On September 27, 2010, a ceremony celebrating the completion of the Russia-China Crude Pipeline was held with Russian President Dmitry Medvedev and Chinese President Hu Jintao in attendance. At the ceremony President Hu said, "The completion of Russia-China Crude Pipeline is a model of mutual benefit and win-win, as well as a new milestone of energy cooperation between Russia and China."
Sept. 27, 2010 Chinese President Hu Jintao and Russian President Dmitry Medvedev took part in the ceremony to mark the completion of the Russia-China Crude Pipeline. On the same day, CNPC inked a general agreement with Transneft over the operation of the Russia-China Crude Pipeline that stretches from Russia's Skovorodino station to China's Mohe station, a framework agreement with Gazprom to import natural gas to China, an agreement with Rosneft on extending oil supply to the Russia-China Crude Pipeline, and an agreement with LUKoil on expanding strategic cooperation.
Oct. 13, 2009 Witnessed by the premiers of the two countries, CNPC signed the framework agreement on Russia exporting natural gas to China with Gazprom, and a memorandum of understanding on upstream-downstream cooperation with Rosneft.
May 18, 2009 Construction commences of the Mohe-Daqing section of the Russia-China Crude Pipeline. The 1,030km pipeline, runing from Russia's Siberian city of Skovorodino to China’s northeastern city of Daqing, has a designed annual deliverability of 15 million tons, and is expected to become operational by the end of 2010.
Feb. 17, 2009 CNPC signs an agreement to design, construct and operate a pipeline from Skovorodino in Russia to China's border area with Transneft, and two agreements on a long-term crude oil trading deal with Rosneft and Transneft respectively, laying the foundation for the construction of a Russia-China Crude Pipeline.
Oct. 28, 2008 An agreement in principle is signed with Transneft on the construction and operation of a crude pipeline from Skovorodino in Russia to Mohe at the Sino-Russian border. According to the agreement, China and Russia will jointly construct and operate the Russia-China Crude Pipeline based on the Phase I project of Russia's Far East Pipeline.
Oct. 2006 CNPC and Rosneft jointly established Vostok Energy Ltd., of which CNPC held 49% of stake.
Sept. 2006 CNPC signed a strategic cooperation agreement with Lukoil Company.
Mar. 2006 CNPC signed a MOU on Supplying Natural Gas from Russia to China, an Agreement on the Basic Principles for the Establishment of Joint Ventures in China and Russia for Strengthening Oil Cooperation and a Minute on CNPC-Transneft Meeting with Gazprom, Rosneft and Transneft respectively.
Jul. 2005 CNPC signed a long-term cooperation agreement with Rosneft.
Dec. 2003 CNPC and Sakhalin Energy signed a frame agreement on exploration and development in Russia’s Sakhalin oilfield.