According to Reuters, the agreement signed by the companies on June 16 this year, includes three million tons of oil supplies to China. That oil will all come from the Yuzhno Khilchuyu field in the far northern Nenets Autonomous Okrug, the brand new field recently put into production by project partners Lukoil and ConocoPhillips.
The deal is valid from July 1, 2009 to June 30, 2010, “or till the contract will be paid in full,” Lukoil said. The cargoes will be shipped by Litasco, a trading arm of Lukoil, Reuters reports.
The Yuzhno Khilchuyu field was put in production last fall by Naryanmarneftegaz, the regional subsidiary of Lukoil and ConocoPhillips. The project which included both field development, pipeline construction and the construction of the Varandey port terminal, is one of the bigger field investments made in the Russian oil and gas industry the last years.
Annual production in the Yuzhno Khilchuyu project now amounts to about seven million tons of oil. The capacity of the pipeline and the terminal is however far bigger – about 12 million.
The Lukoil-Sinopec deal comes as China is increasing its bid for Russian resources. Only last week, Gazprom officially started construction of the Sakhalin-Khabarovsk-Vladivostok pipeline. That is built with the intention to supply gas to China
