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Russia, China finalise oil pipeline and supply deal: govt
Beijing (AFP) April 21, 2009 China and Russia signed an energy agreement Tuesday that will usher in billions of dollars of commercial deals, including the building of an oil pipeline and supply of fuel to a thirsty Chinese market. "China and Russia have agreed to a package of deals on oil pipeline construction, crude oil trade and financing and other projects pertaining to oil cooperation," foreign ministry spokeswoman Jiang Yu told journalists. "This is mutual win-win cooperation and a huge step forward in China-Russia energy cooperation." She did not offer further details of the agreement -- called the inter-governmental oil cooperation pact -- signed by Chinese Vice Premier Wang Qishan and visiting Russian Deputy Prime Minister Igor Sechin. But according to Russian news reports, the sides agreed to a 23-year deal to pump Russian oil to the energy hungry Chinese market, in return for 25 billion dollars in loans from China to Russian oil firms to finance the pipeline. Russia will supply China with 15 million tonnes of crude annually during the period of the deal, Interfax news agency said. China has scrambled to come to an agreement with Russia since oil prices tumbled late last year due to the financial crisis, after years of negotiating the pipeline construction and a timetable for crude deliveries. Meanwhile Russian oil producers have been hit hard by the crisis, with the nation's largest producer Rosneft seeing net profit fall 64.4 percent in the fourth quarter of 2008 due to a drop in oil prices and high tax rates. Wang said the agreement was proof of the two countries' commitment to working together. "With the international financial crisis spreading, this agreement is of huge significance and fully shows that both sides have strengthened cooperation and shown the determination to work together to overcome adversity," he said. "We have established the foundations for the development of comprehensive, long-term and stable cooperation in this industry," China National Radio quoted him as saying. Russian oil major Transneft had said at an earlier stage of the negotiations in February that it had agreed to a 20-year deal to pump Russian oil to China. There was no immediate explanation as to why the deal had been apparently extended by three years. The construction of the oil pipeline from Russia's far east to refineries in China's northeast will start at the end of April and will be completed by the end of 2010, according to Russian news reports. The pipeline is a spur of the East Siberian-Pacific Ocean pipeline that is currently under construction and will transport Russian crude from Siberia to a terminal on its eastern coast. "We hope to complete in a short time the basic infrastructure and provide the Chinese side with stable oil supplies," China National Radio quoted Sechin as saying at Tuesday's signing ceremony. Share This Article With Planet Earth
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Analysis: Caspian division inches forward
Washington DC (UPI) Apr 20, 2009Since 1991, the Caspian basin has emerged as the world's leading untapped energy source. According to the U.S. government's Energy Information Administration, the Caspian's 143,244 square miles and attendant coastline could contain as much as 250 billion barrels of recoverable oil besides an additional 200 billion barrels of potential reserves. Additionally, the EIA places the Caspian basin's natural gas reserves at up to 9.2 trillion cubic meters of recoverable natural gas; even with oil at $50 a barrel, down from its July 11 record high of $147.27 per barrel, the region's recoverable oil alone is worth $12.5 trillion. |
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