Strong quake halts Russian oil supplies to China

Reuters News
Posted: Oct 14, 2011 8:35 AM
Strong quake halts Russian oil supplies to China

By Vladimir Soldatkin and Steve Gutterman

MOSCOW (Reuters) - A strong earthquake struck Russia's Far East near the Chinese border Friday, shaking buildings hundreds of kilometers (miles) away and halting almost all Russian oil supplies to its energy-hungry Asian neighbor.

Schools were evacuated in one Russian city and office workers fled buildings across the border in China, but emergency officials said there were no casualties or significant property damage.

The U.S. Geological Survey said the 6.1 magnitude quake struck Friday at 0610 GMT near Skovorodino in the Amur region, about 5,150 km (3,200 miles) east of Moscow, and 210 km (130 miles) north of China's Heilongjiang province.

Russian oil pipeline monopoly Transneft said it halted oil shipments to China on the 300,000 barrel-per-day East Siberia - Pacific Ocean (ESPO) pipeline after the quake, adding that the pipeline itself had not been damaged.

A spur of the pipeline leads to China from Skovorodino.

Transneft spokesman Igor Dyomin said the company also stopped loading railway cars destined for the port of Kozmino on the Sea of Japan, an export route for another 300,000 barrels-per-day of oil to China other Asia-Pacific nations including South Korea, Japan and the United States.

"The company halted supplies as a preventive measure. Transneft expects aftershocks, but theoretically shipments can be restarted today," said Dyomin, adding that the power supply to some pumping stations was interrupted and reserve capacity was plugged in.

Chandeliers shook and schools were evacuated in Chita, a city about 700 km (440 miles) southwest of the epicenter, Itar-Tass news agency said.

Tremors were also felt in the border city of Blagoveshchensk, 500 km (310 miles) southeast of the epicenter.

The quake caused no casualties or significant damage, Amur region Emergency Situations Ministry spokeswoman Raisa Kopyrina said by telephone. Russia's Interfax news agency cited a resident as saying there was minor damage to structures in villages close to the epicenter.

In the Chinese city of Heihe, people in an 18-storey government building felt tremors and ran outside, state news agency Xinhua quoted a city official as saying.

"The ground kept shaking for one or two minutes and as I was running out of my house, I heard my bowls and plates knocking against one another in the cabinet," Xinhua quoted Li Guiquing, a resident of Beiji Village in the border province, as saying.

There were no immediate reports of casualties or property loss, Xinhua said.

State-controlled Transneft, which operates Russia's 50,000-km pipeline network, has continued receiving oil from producers and shipping oil from Kozmino, Dyomin said.

"We have enough oil reserves at Kozmino to carry out continuous loadings," he said.

Transneft began shipping oil along the first stage of the ESPO pipeline, which runs in a 2,757-km arch around Lake Baikal, on January 1 of this year.

Until then, oil from Russia, the world's top crude producer,

had been transported to fast-growing China only by rail.

When the 4,070-km pipeline's second stage is finished in 2013, it will be the world's longest. The $25 billion pipeline dwarfs all other infrastructure projects in post-Soviet Russia in terms of cost.

The supply interruption came amid a persistent dispute between the neighbors, with Transneft claiming that China has underpaid it by tens of millions of dollars due to differences over a transportation tariff.

During a visit to Beijing this week with Prime Minister Vladimir Putin for talks with energy and other issues, Russia's top energy official Igor Sechin said the dispute was resolved and both parties will soon formalize the agreement.

Moscow and Beijing are also wrangling over pricing in tortuous discussions that have prevented them from nailing down a long-discussed deal for Russia to supply China with 68 billion cubic meters of gas per year for 30 years.

(Additional reporting by Ludmila Danilova and Gleb Gorodyankin in Moscow and Ben Blanchard in Beijing Editing by Maria Golovnina)