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Reversing an earlier decision,
Russia’s Rosneft company has apparently agreed to transport 200,000
metric tons of oil monthly through Mongolia to China.
On May 30, Rosneft had announced
they would no longer be able to supply oil to China via rail through
Mongolia. At the time, the company was seeking reductions in rail tariffs
to make the trip feasible.
Rosneft has said they need
an $8 per metric ton of oil reduction in rail costs to allow them to
profitably transport oil to China.
Following negotiations, it
appears the Russian rail monopoly, Russian Railways company, has agreed
to a 22 percent tariff discount. Rosneft had previously asked for a
30 percent reduction.
UNIPEC, the trader of China’s
Sinopec company, has also agreed to certain price changes to allow Rosneft
to come closer to its targeted transportation price.
The final hurdle, expected
to be overcome within days, is with Ulan-Bator Railway (UBRW), a Russian-Mongolian
company. However, it is believed UBRW will also reduce its tariff to
allow the deal to proceed.
Rosneft will transport oil
by rail through the Naushki passage at the Russia-Mongolia border. In
addition, Rosneft currently transports oil to China through Manchuria.
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