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    Russia, China close to deal on ESPO oil pipeline branch

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    State-owned Russian oil firm Rosneft and China's CNPC are in the final stages of talks to build an oil pipeline branch from Russia's Far East to China, Russia's president said Thursday.

    MOSCOW, May 22 (RIA Novosti) - State-owned Russian oil firm Rosneft and China's CNPC are in the final stages of talks to build an oil pipeline branch from Russia's Far East to China, Russia's president said Thursday.

    "We have a basic agreement on this [branch]... We hope that all the main provisions, the main parameters for future cooperation will be agreed," Dmitry Medvedev said in an interview with Chinese journalists ahead of his visit to China, set for May 23-24.

    Under an agreement signed between China National Petroleum Corporation and Transneft, the oil pipeline operator, the construction of the pipeline branch will be funded by China.

    The ESPO pipeline is slated to pump up to 1.6 million barrels of crude per day from Siberia to Russia's Far East and then on to China and the Asia-Pacific region.

    The pipeline's first leg, estimated at $11 billion, was expected to be commissioned in December 2008. However, Transneft said in February that the commissioning of the project would be delayed from late 2008 to late 2009.

    The second leg will stretch for 2,100 kilometers (1,304 miles) from Skovorodino to the Pacific. It will pump 367.5 million barrels of oil annually. The capacity of the Taishet-Skovorodino pipeline, being built as part of the project's first leg, is also expected to increase to 588 million barrels from the initial 220.5 million bbl.

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