Reference
The document has been drafted by the Ministry of Foreign Affairs jointly with the Ministry of Energy.
The agreement determines the conditions for expanding cooperation between the Russian Federation and the People’s Republic of China on increasing oil supplies to China.
It also determines the authorised organisations of the sides that are responsible for the implementation of the agreement – Rosneft Oil Company and China National Petroleum Corporation (CNPC).
The agreement provides for increasing oil supplies to China based on a long-term crude oil supply agreement (or several agreements) to be signed between the authorised organisations of the sides for a total term of 25 years with a possible extension of this term to up to five years.
Under the agreement, the sides will contribute to increasing crude supplies by the authorised organisations, using the Skovorodino-Mohe oil pipeline. The authorised organisations can determine other routes of crude supplies over and above the amounts envisaged by the delivery via the Skovorodino-Mohe oil pipeline to supply oil to refineries in western China.
The price of crude supplied under the agreement shall be determined in relevant agreements to be signed between the sides’ authorised organisations (or their subsidiaries).
Under Part 6 of Article 3 of the draft agreement, the sides shall grant their authorised organisations as well as their subsidiaries, in cases covered by the said article, the right of access to the relevant pipelines to supply oil to China under the agreements.
According to Article 6 of the Federal Law On Natural Monopolies, the right of access to the system of Russian major pipelines and terminals in the case of oil exports beyond the Russian customs territory shall be granted to oil producing organisations registered in accordance with the established procedure, as well as to organisations that are parent companies of oil producing organisations, in proportion to the volumes of extracted oil fed to the system of major pipelines, taking into account the 100% flow efficiency of major pipelines (based on their technical capacity).
The draft agreement was discussed and approved at the Government meeting on November 14, 2013.
