Russia, China nearing agreement on gas: Putin

11th October 2011, Comments 0 comments

Moscow and Beijing are nearing the "final stage" of agreeing a huge gas deal delayed for years by disputes on price, Russia's Prime Minister Vladimir Putin said Tuesday during a visit to Beijing.

Putin made the comments after meeting Chinese Premier Wen Jiabao on the first day of the two-day visit, his first foreign trip since he announced plans last month to reclaim the Russian presidency.

Russia is the world's largest energy producer, and discussions over pumping gas to China -- the world's top energy consumer -- were expected to top the agenda for his visit, during which he will also meet President Hu Jintao.

"We are close to the final stage of work on gas supplies to Chinese market," Putin told journalists.

"Those who sell always want to sell at a higher price, while those who buy, want to buy at a lower price. We need to reach a compromise which will satisfy both sides."

Russian gas giant Gazprom and China National Petroleum Company signed a framework agreement in 2009 that could eventually see almost 70 billion cubic metres of Russian gas sent to China annually for the next 30 years.

But talks have become bogged down in pricing disagreements and contrary to expectations, Hu's June visit to Moscow delivered no breakthrough.

Chinese officials said last November the prices sought by the two sides differed by $100 per 1,000 cubic metres.

Putin's spokesman played down the prospect of any breakthrough during the visit saying the two sides were "not in a hurry".

"It's important to reach agreement, but it is not necessary that it be done in the next few days," Dmitry Peskov told AFP by telephone.

Putin arrived in Beijing a day after Russia and China signed 16 economic and trade deals worth over $7 billion, which China's foreign ministry said were "in the fields of technology transfer, research and development and mineral development".

Among the deals signed Tuesday was an investment by China's sovereign wealth fund into a new Russian state-backed fund to encourage foreign direct investment in Russia, Peskov said.

The China Investment Corporation will put $1 billion into the Russian Direct Investment Fund, founded in June with backing from Putin and Russian President Dmitry Medvedev.

China became Russia's top trading partner for the first time last year and the two countries want to increase trade from $70 billion this year to $100 billion by 2015 and $200 billion by 2020.

Wen said both countries have "successfully overcome the financial crisis".

Russia and China set much store by their bilateral ties and are often viewed as partners in international diplomacy.

Both countries are veto-wielding permanent members of the UN Security Council, and last week infuriated the West by blocking a UN resolution against Syrian President Bashar al-Assad's deadly crackdown on protests.

Russian Foreign Minister Sergei Lavrov said this week Moscow and Beijing were ready to propose a new UN resolution on Syria that would condemn violence carried out both by Assad's regime and the rebel opposition.

On Tuesday, China's foreign ministry urged Syria to move faster to implement reforms, veering away from its longstanding policy of non-interference in the affairs of the country.

Putin has paid frequent visits to China -- where he is very well known -- in his capacities as president and then prime minister since he took power in 1999.

However, the Stockholm International Peace Research Institute said recently China's dependence on Russia for arms and energy imports had declined, and Moscow's position when dealing with Beijing has weakened as a result.

It pointed out in a report last week that China had found other partners in the oil and gas sectors in the Middle East, Africa and central Asia.

Russia's security service the FSB revealed last week that it had been holding a Chinese national identified as Tong Shengyong for the past year on espionage charges linked to Russia's S-300 surface-to-air missiles.

Neither the Kremlin nor Beijing, a major purchaser of Russian weapons, have issued any comment, possibly to try to sideline the issue ahead of Putin's visit.

Putin and Wen did discuss military matters such as potential arms sales, Peskov said, but he declined to give details or address Tong's detention.

© 2011 AFP

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