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China-Russia pipeline pact boosts energy links
(China Daily/Xinhua/Agencies)
Updated: 2008-10-30 07:52

A Sino-Russian pact on a pipeline from Siberia to supply oil to China's northeast was among the agreements witnessed by Premier Wen Jiabao and his Russian counterpart Vladimir Putin in Moscow on Tuesday.

Russian media reports said Moscow's agreement to move ahead on the long-delayed project was won with pledges of financial support from Beijing.

The pipeline, which extends from western Siberia to the Pacific coast, is to be connected to China from the Siberian city of Skovorodino, 70 km north of the Sino-Russian border. The cost of the pipeline spur has been estimated at $800 million.

Russian pipeline monopoly Transneft and China National Petroleum Corp (CNPC) agreed to build the spur to carry 15 million tons a year of oil (300,000 barrels per day) between the countries' trunk pipelines from 2009. This would be enough to meet 4 percent of China's annual demand.

Russia's top energy official, Deputy Prime Minister Igor Sechin, said Russian oil firms would receive "considerable" loans from China in return for increased oil supplies and that the exact amount would be determined by individual projects.

"Financing is required to realize major projects," Sechin told reporters after the signing ceremony.

Three industry sources close to talks reportedly said the countries were in talks to secure between $20 billion and $25 billion in Chinese loans in exchange for greater supplies of Russian oil.

Wen listed cooperation on resource development first among five proposals for economic cooperation with Russia.

"Energy cooperation is an important part of the China-Russia strategic partnership," said a statement issued after Wen's meeting with Putin. "The two sides support deepening cooperation in developing oil and gas resources."

Apart from the pipeline agreement, Xinhua reported, the two countries agreed to:

work jointly in oil production and processing, natural gas production and in chemical industries;

extend cooperation in nuclear energy, including the construction of Tianwan nuclear power plant in Jiangsu province, uranium mining, post-processing of spent fuel and the treatment of nuclear waste;

strengthen long-term cooperation in space technology to ensure the completion of the 2007-09 space cooperation program as scheduled;

promote cooperation in nanotechnology, energy saving, ecology and rational utilization of natural resources;

enhance cooperation in such areas as trade and project financing, and export credit insurance; and

further cooperate in the civil aviation sector, including joint manufacturing of large civilian helicopters.

Wen concluded his three-day official visit to Russia yesterday and left for Kazakhstan to continue his two-nation tour.


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