Frustrated China seen getting no promises off Putin

MOSCOW/BEIJING, Mar 20 (Reuters) Russian promises of access to its vast energy reserves have kept Chinese leaders paying court for years, but President Vladimir Putin may find patience wearing thin this week unless he can offer something concrete.

Moscow plans to build oil and gas pipelines to supply some of its huge energy resources to China's booming economy, but years of discussions have brought little progress, with the oil pipeline route yet to be set in stone.

And a senior energy planner fired a warning shot about growing frustration in Beijing with an unusually blunt interview ahead of a state visit by Putin this week.

''One moment Russia is saying they have made a decision, the next saying that no decision has been made. To date, there has been no correct information. This is regrettable,'' Zhang Guobao, vice-minister of the powerful National Development and Reform Commission, told Russia's state-owned Interfax news agency.

Analysts say talks between Putin and China's Hu Jintao on Tuesday and Wednesday are likely to bring little movement on the much-delayed oil pipeline which Russia wants to build from East Siberia to the Pacific, with a possible branch line to China.

Putin has repeatedly called for work to start on the pipeline, which was originally mooted in 2000 with a completion date of 2005.

After conflicting messages from Russian officials and environmental disputes, initial survey work has begun.

''Currently, the Sino-Russia pipeline question is one step forward, two steps back. Today is cloudy with a chance for sun while tomorrow is sunny with a chance for clouds, just like a weather forecast,'' Zhang said.

The proposal for a gas pipeline is even less advanced.

''Even though there have been a lot of promises expressing Russia's interest in exporting natural gas to China, in truth no real progress has been made,'' Zhang said.

PRELIMINARY AGREEMENT China National Petroleum Corp and Russia's Gazprom plan to sign a preliminary gas agreement during Putin's trip, but with no agreement on price, the document may signal little progress.

''Perhaps it means something. But the preliminary agreement on the oil pipeline was reached in 2000 and they haven't even started building it,'' said Alexander Lukin, a Russian expert on relations between the two countries.

Lukin said Russia also had a bone of contention over trade, after seeing its share of machinery sales in China fall from about 43 percent in late Soviet years to the current around 2 percent.

China's economy is booming by importing commodities such as Russian metals and turning them into export goods, a model Russia's oil-centred economy can only hope to emulate.

''Mr Putin talks about value-adding and refining, but Russia is caught between not wanting to be only a commodity producer but not being high-tech enough to be another Japan,'' said Stephen O'Sullivan, head of Russia research at Deutsche UFG.

''It seems to me that Russia has more to offer than the Chinese have to offer them at this stage,'' he said, adding that China had already helped Russia out in 2004 by funding Russia's controversial purchase of a big oil asset.

That billion favour allowed Russian state oil company Rosneft to buy the main production unit of YUKOS, a firm forced to sell the asset because of massive back-tax claims, despite U.S. court action designed to stop the sale.

Rosneft is slated for part-privatisation later this year with a possible sale of a stake to a strategic investor. Chinese companies are frequently named as possible buyers.

But Zhang said Russia was keeping China at arm's length and had not yet shown willingness to accept Chinese investment.

''Truthfully, we've been in contact with Russia for such a long time, but we still don't understand Russia, I feel. We don't know who can make the decisions, or who to seek out.'' Although Rosneft's chief executive will accompany Putin, a company spokesman said ''nothing sensational'' was expected from the visit, during which Rosneft will open an office in Beijing.

''China does not really have any way to press Russia. The best option is looking at how they can survive without Russia,'' said Kang Wu at the East-West Center in Hawaii.

''That's maybe the best weapon they have -- apart from just directly showing their desperation for getting energy.'' REUTERS KD PM1347