Russia, China fete completion of oil pipeline

27th September 2010, Comments 0 comments

The leaders of China and Russia celebrated Monday the completion of a cross-border oil pipeline, a symbol of growing ties between the two emerging economic powers, particularly in the energy sector.

Visiting Russian President Dmitry Medvedev and his Chinese host President Hu Jintao attended a launch ceremony for the long-awaited pipeline linking the world's biggest oil producer with the largest energy consumer.

The deal reached last year -- which will see China receive oil for 20 years in exchange for 25 billion dollars in loans -- is the centrepiece of a new era of energy cooperation between the two neighbours.

They are still finalising a deal that could see 70 billion cubic metres of Russian natural gas sent to China each year, and have also announced plans to jointly build a five-billion-dollar oil refinery in northern China.

"Through this visit, we will definitely be able to deepen strategic communication, promote cooperation between the two sides and promote the further development of the Sino-Russian strategic partnership," Hu said.

Medvedev spoke of the "close cooperation" that would be fostered during his three-day trip -- his second to China since taking office in 2008.

Energy supplies account for the bulk of Sino-Russian trade but Moscow also wants to secure Beijing's help in modernising the Russian economy and is seeking broader Chinese investments and know-how in various sectors.

"Today, Russia and China are largely solving similar tasks as they move along the path of comprehensive modernisation," Medvedev told China's official People's Daily, in comments released by the Kremlin.

"Never before have our ties been characterised by such a high level of mutual trust," Medvedev said, adding that his government welcomed Chinese investments in high-tech industries including aircraft construction.

Trade between Russia and China totalled 25.5 billion dollars in the first six months of this year, according to official data.

The deal on the oil pipeline -- which runs from eastern Siberia to the northeastern Chinese city of Daqing -- is part of efforts by Moscow to send more of its crude exports out of Europe and towards Asia.

Beijing is also looking to secure much-needed resources to fuel its booming economy, now the second largest in the world behind the United States.

Relations between Moscow and Beijing -- once bitter foes during the Cold War -- have a turbulent history, but have improved dramatically in recent years.

Both countries view themselves as counterweights to US global dominance, but Moscow has viewed China's rapid economic rise with some unease.

Nikolai Tokarev, head of the Russian oil pipeline monopoly Transneft, said commercial supplies from the pipeline would begin from January 1, and that 15 millions tons of crude would initially reach China each year.

Russia's Gazprom, the world's largest gas producer, also signed a framework agreement with China National Petroleum Company (CNPC) last year that could see about 70 billion cubic metres of natural gas sent to China annually, but the two sides have yet to sort out a final pricing mechanism.

Russian Deputy Prime Minister Igor Sechin, the country's powerful energy czar, said the deal would be signed by mid-2011.

"Cooperation between Russia and China in the gas sphere is strategically promising. In this sense, Russia is a natural partner for China," Sechin said.

Medvedev arrived in Beijing from the northeastern city of Dalian, where he paid respects to Soviet-era soldiers who died defending the port from Japanese invaders and said the ties between the two countries were "sealed by blood."

© 2010 AFP

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