China Tuesday received the first shipment of crude oil from a pipeline connecting the country with Russia, which started operating under a trial run.

The shipment is part of a US$25 billion oil-for-loans deal signed last year in which Russia, the world's largest oil producer, agreed to supply China with oil for 20 years as it seeks to expand from its European markets.

PetroChina Co agreed to buy the crude from Russia state oil company OAO Rosneft at market prices.

Russian oil pipeline monopoly OAO Transneft started pumping the crude late Monday via the first pipeline connecting the two countries, and the first shipment arrived in Mohe in China early yesterday, according to the General Administration of Customs.

During the trial run, China will import 250,000 tons of crude from Russia this month and 300,000 tons next month from Rosneft.

From the beginning of 2011, Russia will supply China with the full contracted volume of 15 million tons a year via the pipeline - meeting about 4 percent of China's oil demand in 2009.

The pipeline can handle 30 million tons a year, Xinhua said.

The pipeline runs more than 1,000 kilometers from the Russian city of Skovorodino, near China's border, to Daqing in Heilongjiang Province. It is a branch of a main line that will extend over 4,000 kilometers from East Siberia to the Pacific.

(Shanghai Daily November 3, 2010)