Rosneft Opens Arctic Pipeline as Vostok Oil Targets 50 Million Tonnes by 2030
Last week's Vankor-Payakha startup is the first infrastructure step in a RUB 10 trillion project aimed squarely at Chinese demand.
Rosneft activated a new pipeline last week (week of 2026-09-07) connecting the Vankor and Payakha fields in Russia's Arctic with the Bukhta Sever terminal on the Arctic coast, the first physical infrastructure step in a project CEO Igor Sechin says will eventually produce 100 million tonnes of oil per year. The line's design capacity matches that target.6
Vostok Oil's scope is large. The project encompasses the Vankor cluster, the Zapadno-Irkinsky block, the Payakhskaya group of fields and the East Taimyr cluster, with proven liquid hydrocarbon reserves of at least 6 billion tonnes. Rosneft estimated the full development at RUB 10 trillion — roughly USD 135 billion at the exchange rate prevailing when that figure was published — including two airports and 15 purpose-built industry towns.6
Sechin said that under current sanctions constraints, commissioning can deliver 30 million tonnes per year as early as H2 2027, rising to 50 million tonnes by 2030. China is the intended buyer for most of that output. In early February 2022, around the same days Putin and Xi met at the Beijing Winter Olympics, Rosneft and the China National Petroleum Corporation signed an USD 80 billion, 10-year supply deal covering 100 million tonnes, with oil routed from Kazakhstan to refining plants in Northwest China.6
Rosneft is already China's largest crude supplier. Russia has held that position for four consecutive years, with annual deliveries exceeding 100 million tonnes in total, according to data reported by news.webindia123.com. In the first seven months of 2026, Russian suppliers delivered 67 million tonnes to China, lifting Russia's share of Chinese oil imports to a record 23%, while Russia-China trade turnover rose 26% in that January-to-July 2026 period compared with a year earlier.5
Sechin cited USD 27 billion in cumulative savings to Chinese buyers from purchasing Russian rather than Middle Eastern crude since 2022 — a calculation reflecting the discount Urals has historically carried relative to other grades. That discount has largely vanished. Urals was quoted at $106.45 per barrel as of Wednesday (2026-09-16), fractionally above ICE Brent front-month at $105.60, compressing whatever pricing advantage Russian barrels once offered Chinese refiners and trimming one of the economic arguments for deepening the supply relationship.5
Rosneft's own finances show the strain. The company reported net profit attributable to shareholders of RUB 200 billion, around $2.31 billion, in H1 2026, down from RUB 245 billion in H1 2025 despite higher production. Rigzone reported that lower income, not lower output, drove the gap — a distinction that bears on whether Rosneft can self-fund a USD 135 billion build programme.3
Gas flows alongside the crude expansion. Power of Siberia 1, the 3,000-kilometre pipeline operating under a 30-year, $400 billion deal, is moving almost 39 bcm annually into China, according to russiaspivottoasia.com analysis. Exports jumped by roughly a quarter in 2025 to 38.8 bcm, exceeding the line's planned annual capacity of 38 bcm, Reuters reported. Putin and Xi agreed at their most recent summit to raise volumes on that route to 44 bcm per year. By end-2025, Russian gas accounted for nearly 30% of China's natural gas imports, covering 47% of pipeline supply and 14% of LNG.4,2
Power of Siberia 2, the planned 2,600-kilometre line via Mongolia designed to carry 50 bcm from Russia's Yamal fields, remains on paper. The Independent reported that Russia and China reached "a general understanding" after their most recent summit but that key commercial terms and a construction timetable still needed to be agreed. China's 15th five-year plan, released in March 2026, committed only to advancing "early-stage" work.1
The gap between Sechin's output targets and what now exists is significant. A new pipeline link and a design capacity figure are not producing barrels. Sanctions continue to restrict access to the specialist Arctic equipment that Vostok Oil requires at scale, and Rosneft has not detailed how it plans to bridge that constraint before the H2 2027 delivery date Sechin cited. JKM Asian LNG was priced at $27.76 per MMBtu on Wednesday (2026-09-16) — competitive enough that Chinese buyers have clear incentive to take discounted Russian barrels if Vostok Oil delivers, but also high enough to sustain alternative supply investments that give Beijing leverage in any commercial renegotiation with Moscow before the first Arctic barrels flow.6