Related: Kazakhstan oil piped into China

A worker performs on a welding operation of the China-Kazakhstan oil pipeline in this undated photo. The costs for the 960-kilometer pipeline amounted to US$700 million and the designed capacity is to pipe 20 million tons of oil to China each year. (Xinhua Photo)

    ALATAW PASS, Xinjiang, May 25 (Xinhua) -- Crude oil from Kazakhstan poured into China on Thursday morning through a crossborder pipeline that is designed to transmit 20 million tons of oil a year, 15 percent of China's total crude oil imports for 2005.

    This is the first time for imported oil to be directly pipelined into China, and experts say the move will help enhance China's oil supply and provide an ideal outlet for Kazakhstan's oil export.

    Brownish oil sprang into a petroleum hub in Alataw Pass, northwest China's Xinjiang Uygur Autonomous Region, at 3:10 a.m. Thursday, about 30 hours after Kazakhstan began pumping oil into the 960-km pipeline, customs officers at the Alataw Pass told Xinhua.

    Technicians with the Sino-Kazak Oil Pipeline Co. Ltd. opened the valve on the China-Kazakhstan border at 7:32 p.m. Tuesday after instructions were received from their Kazak counterparts in Atasu, who started to pump oil into the pipeline at 8:22 p.m. the same day.

    The first phase of the pipeline will transmit 10 million tons of oil a year, a figure that will double when the entire project is completed in 2011. The total length of the pipeline would then be around 3,000 kilometers.

    Industry insiders say construction of the oil pipeline is a win-win strategy for both countries as it will hopefully ease China's energy dearth and provide an ideal destination market for Kazakhstan's rich oil resources.

    "It has provided a direct link between Kazakhstan's rich oil resources and China's robust oil consumer market," said Yin Juntai, deputy general-manager of China Petroleum Exploration and Development Company.

    The pipeline was jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company, Kazmunaigaz.

    Kairgeldy Kabyldin, vice-president of the Kazakhstan National Petroleum and Natural Gas Company, praised the transnational oil pipeline as a "new paradigm of cooperation" between the two countries.

    He said it is the common aspiration of the Kazak and Chinese governments as well as the two peoples to step up cooperation in the energy sector, and such cooperation plays a vital role in promoting mutual economic development and improving the quality of the peoples' lives.

    Kazakhstan's crude oil output topped 50 million tons in 2002, the most recent time that data is available from here, and about 70 percent of its oil is exported. With huge reserves in the Caspian Sea, insiders say the country's oil output will top 100 million tons by 2015.

    The new oil shipping route will link Chinese consumers with the oil fields of the Caspian Sea, as well as alleviate China's excessive reliance on the Strait of Malacca, a traditional route for 80 percent of China's imported oil, said Yin.

    Last year, China's crude oil import totaled 127 million tons, about 40 percent of its total consumption. About a half of China's oil import came from the Middle East and only 1.3 million tons was imported from Kazakhstan, via Alataw Pass, in 2005. Insiders predict that the figure will climb to 4.75 million tons this year and to around 8 million tons in 2007.

    China and Kazakhstan started energy cooperation in 1997, marked by an intergovernmental agreement covering diverse means of collaboration in oil and gas fields, including an oil pipeline between western Kazakhstan and China's Xinjiang.

    The transnational pipeline, extending 962.2 km from Atasu in Kazakhstan to the Alataw Pass of Xinjiang, was completed in November 2005 at the cost of 700 million U.S. dollars.

    China has completed laying a 252-km oil pipeline between Alataw Pass to Dushanzi in Karamay where the country's largest oil refinery plant will become operational in 2008 to produce 5.5 million tons of refined oil a year.

    China produced 182 million tons of crude oil in 2005, a figure experts say will climb up to 195 million tons by the end of 2010.

    By then, the country's production demand and consumption will be hovering around 330 million tons and 350 million tons respectively, said Pan Derun, deputy chairman of the China Petroleum and Chemical Industry Association.

    Amid global oil price hikes, the Chinese Government on Wednesday raised the prices of gasoline, diesel and aviation kerosene by 500 yuan ((62.4 U.S. dollars) per ton, the ninth and the biggest price hike for refined oil products since July 2003.

    The current retail price of 93 gasoline is 5.09 yuan (0.64 U.S. dollar) per liter, 0.44 yuan (0.055 U.S. dollar) higher than two months ago. Enditem