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Construction of China's first major land-based cross-border pipeline began Tuesday, linking the nation with Kazakhstan.
The two countries started building a 1,000-kilometer section from Atasu in Kazakhstan, to the border town of Alashankou in China's Xinjiang Uygur Autonomous Region on Tuesday, China News Service reported.
The US$700 million Atasu-Alashankou section, the most important section of the Sino-Kazakh pipeline, will be able to deliver 10 million tons of crude oil a year to China when it is completed in 2005.
The whole Sino-Kazakh pipeline, to be completed in 2011, will cost about US$3 billion. It will reach westwards joining the existing 450-kilometer Atyrau-Kenkiyak pipeline in the central Asian republic. Eastward, it will connect with China's West-to-East oil pipeline.
The Sino-Kazakh pipeline, with a total length of over 3,000 kilometers, would be able to deliver up to 20 million tons of Caspian Sea crude oil annually to western China.
The China-Kazakhstan pipeline was first proposed in 1997. But negotiations were suspended for six years until more oil reserves were found in order to make the project economically viable.
Kazakhstan, which now exports 70 percent of its oil from pipelines linked to Russia, wants to find more export markets. China, on the other hand, needs more oil to fuel its soaring economic growth and also diversify its oil imports.
At present, more than 60 percent of China's imports come from the Middle East via the Malacca Strait.
"It is very important for China to establish an onshore oil import channel," said Hu Jie, an engineer with an oil and gas exploration research institution under the China National Petroleum Corp.
(Shenzhen Daily September 29, 2004)
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