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Rosneft, CNPC plan long-term cooperation

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MOSCOW, July 1 (RIA Novosti) - Rosneft, Russia's second largest oil company, and the China National Petroleum Corporation (CNPC) have signed an agreement on long-term cooperation.

The companies will study possibilities of increasing petroleum supplies to China, Rosneft said in a press release. Rosneft will consider using the Atasu-Alashankou and Taishet-Skovorodino pipelines to this end.

The former will be laid from the Atasu oil loading rack in northern Kazakhstan to the Druzhba-Alashankou railroad terminal near the Chinese border. The first branch of 962-kilometer long pipeline is to be built in 2005. Initially, the pipe will also pump Russian oil from Western Siberian fields. The branch's capacity will be 10 million metric tons of oil a year.

The Eastern Siberia-Pacific Ocean oil transport network will be laid from Taishet (Siberia), Skovorodino (Far East), to Perevoznaya on the Amur Bay, the project to be completed in 2009. The pipeline's total capacity will be up to 80 million metric tons of oil a year. The Taishet-Skovorodino branch, which will end on the Chinese border, is scheduled to be built before mid 2008. Its capacity will be 30 million metric tons a year.

Rosneft and CNPC also intend to discuss cooperation in oil and gas prospecting and development off the shore of the island of Sakhalin in the north Pacific. The companies will also look into cooperating in the sphere of strategic investment, establishing a joint venture, equity participation, asset swaps, etc.

Both companies showed interest in increasing deliveries of the natural gas produced as part of Sakhalin I project, in which Rosneft owns 20%, to China and in signing the relevant documents in the fall 2005.

Three deposits are being developed on Sakhalin's eastern shelf under Sakhalin I. The Chaivo deposit is being developed at the moment, which is the first phase of the project. Natural gas will start being supplied to Russia's domestic market in the third quarter of 2005, and large-scale oil production will be launched in 2006.

Rosneft and CNPC intend to set up a coordination committee to promote cooperation. The body will comprise the two companies' senior managers.

Rosneft is Russia's only 100% state-owned company. In 2005, it plans to produce more than 78 million metric tons of oil.

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