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Russia's biggest oil exporter to China said yesterday it plans to boost supplies to the country by up to 65 percent next year, aiming to eventually become the country's largest foreign partner in the energy field.

 

The Russian state-owned OJSC Rosneft will increase exports of crude oil and oil products to China to 20 million tons next year, up from an expected 12 million tons this year, said Sergey Bogdanchikov, the company's president who was with Russian Prime Minister Mikhail Fradkov in China.

 

The two sides haven't signed a contract yet on the increased supplies, Bogdanchikov said at a news conference after the inauguration of the company's first representative office in Beijing, which he said highlighted China's importance in its global expansion strategy.

 

The office will supervise the company's ongoing projects in 22 locations in the Asia-Pacific region and launch new projects in the area in the future, he said.

 

"We cannot establish offices in all the places; we only choose what we consider as significant enough," he said.

 

Rosneft is responsible for about 70 percent of Russia's oil exports to China and almost a quarter of the overall Russian exports to the country in value.

 

In October, Rosneft and the China National Petroleum Corporation (CNPC) announced a plan to create a joint venture.

 

The venture will explore and develop oil in Russia and build a refinery in China with a capacity of 9.59 million tons a year. They also agreed to open as many as 300 filling stations in China, he said. "With our estimate that China's demand for crude oil will double in 2015, we are fully optimistic about the future of the joint venture."

 

The deal marks the latest tie-up between the companies after the CNPC bought a US$500 million slice of Rosneft's US$10.4 billion mid-year initial public offering.

 

Bogdanchikov said Rosneft's increased oil supplies to China next year would be sent by rail through Mongolia or through the Kazakh pipeline. There was no word of progress on a planned pipeline to deliver Siberian crude.

 

Bogdanchikov also said Rosneft expects a gas and oil field on Sakhalin Island in Russia's Pacific Coast to begin production near year, with an expected output of 1.92 million tons per year. China is welcome to bid for supplies from that project, Bogdanchikov said.

 

Thermonuclear project

 

In another development, E.P. Velikhov, a Russian academic and renowned thermonuclear expert, said production of the International Thermonuclear Experimental Reactor (ITER) Program, the world's first experimental fusion reactor, is expected to start from the beginning of next year.

 

Velikhov said officials in charge of energy management from the seven program participants -- the EU, Russia, China, India, South Korea, Japan and the US -- will meet on November 21 in France to sign a formal agreement to start production of parts of the reactor in each country.

 

Parts of the reactor will finally be assembled in Cadarache in southern France.

 

The project is estimated to cost US$5 billion and will take 10 years to complete. The EU will cover 40 percent of the cost, with the other six participants contributing the rest in equal shares.

 

Fusion energy is believed to be much safer and more environmentally friendly than traditional nuclear power plants that use nuclear fission. However, it needs extremely high temperatures -- more than 10 million degrees Celsius -- to be produced.

 

(China Daily November 11, 2006)