Wen set to sign Russia energy deals

China’s PM in Moscow to boost trade and finalise pricing agreement on gas amid growing links between the two neighbours.

China Wen Jiabao
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China wants to boost its energy security while Russia wants to diversify its energy exports [AFP]

Wen Jiabao, the Chinese prime minister, is heading to Russia for a visit set to underscore the increasingly close relationship between two of the world’s largest economies.
 
After years of distrust over their political ideologies, Wen is seeking to nail down a pricing agreement for gas supplies to China and to expand trade co-operation.

Russia wants to diversify more of its energy exports away from Europe, its traditional market, and into its rapidly growing southern neighbour.

China, meanwhile, is the world’s largest oil consumer and wants to boost its energy security by looking for new sources of fuel.

Neave Barker, Al Jazeera’s correspondent in Moscow, said that the visit “exemplifies the sense of mutual co-operation to allow each other’s economies to grow and flourish”.

Wen will also go to Tajikistan for a meeting of the Shanghai Co-operation Organisation, a Central Asian regional group, comprising Russia, China and four former Soviet central Asian states.

Gas dispute

Russia has begun test-pumping about 600,000 tonnes of oil along a new East Siberian-Pacific Ocean (Espo) pipeline that is set to start bringing 300,000 barrels per day to China in January next year.

With Moscow eager for more Chinese cash to fuel growth, Beijing agreed in October to lend Russia $6bn for the development of coal deposits.

China had already agreed in 2009 to lend $10bn to Russian oil pipeline monopoly Transneft and another $15bn to state-controlled oil giant Rosneft in exchange for the oil to be transported through the Espo pipeline over 20 years.

Russia, which has built a nuclear reactor in China, has agreed to expand nuclear power co-operation in seven areas with China, including exploring uranium mines, building floating nuclear power plants, eliminating old plants and developing markets abroad.

But their close energy ties have been clouded by a dispute about pricing for gas, which has dragged on for years.

Chinese officials say they hope to resolve the disagreement during Wen’s visit.

Gazprom, the Russian energy giant, said in 2006 that it would build two major pipelines to China but the projects have been delayed because of the wrangling over pricing.

Wen will also be attending a summit of 13 countries in St Petersburg on how to prevent tigers from becoming extinct.

Chinese demand for products derived from tigers for medicine has been identified as one of the main threats weighing on the Amur tiger, which lives in Russia and China.

Source: Al Jazeera, News Agencies