Hu to push energy deal in Moscow

The Chinese president is looking to expand business opportunities with Moscow.

    Hu is on his third visit to Russia [Reuters]  

    China and Russia are permanent members of the United Nations Security Council who have used their veto power to blunt Western efforts to sanction Iran and other challengers to US policy.


    Over the weekend, they both backed a UN resolution imposing new sanctions on Iran for continued uranium enrichment, which critics say is aimed at eventually giving Tehran the ability to assemble nuclear weapons.


    Iran is sure to be on the agenda when Hu sits down for talks with Vladimir Putin, the Russian president, officials said.


    Energy deals


    But Hu, on his third visit to Russia as the national leader, will also be looking to expand trade between the two growing economies, especially oil and gas for energy-thirsty China.


    "Russia needs to keep its military industry floating, and China is really important to doing that"

    Nicklas Norling, researcher,
    Uppsala University,

    China is the world's number two oil consumer, and Russia the second-largest exporter. But their potential partnership has been stymied by both nations' desire to keep a state grip on energy deals. Previous plans for oil and gas pipelines have languished after both sides trumpeted initial agreements.


    China wants to pay less for the gas and it is unclear whether Russia has enough crude to satisfy China and Japan, which have been vying for supplies.


    Moscow has flip-flopped over which of these Asian rivals should get the first pipeline connection, leaving Chinese buyers hanging on promises of increased railway supplies of oil.


    Russia's state-controlled oil firm, Rosneft, has repeatedly failed to meet its targets for increased crude oil volumes by rail to China.


    But Rosneft will sign a deal on Tuesday with Unipec, the trading arm of Sinopec Corp, to reopen a border crossing at Naushki, adding three million tonnes of crude a year (60,000 barrels a day), Kommersant newspaper reported.


    Russia may be willing to make some energy concessions to China as Moscow seeks to diversify markets and investment, said Nicklas Norling, a researcher at Uppsala University in Sweden who has studied their relations.


    "Energy is a source of tension but also potential co-operation," he said.


    Hu will visit the oil-rich region of Tatarstan after Moscow, which may yield an oil deal with the regional oil firm Tatneft, a local government spokeswoman said. She declined to give details and said the deal was not yet definite.


    Putin also hopes that Hu will buy more Russian-made military hardware as China drives ahead with defence modernisation, Norling said.


    "Russia needs to keep its military industry floating, and China is really important to doing that," he said.

    SOURCE: Agencies


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