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China eyes energy co-production with Russia

Written by: Staff

BEIJING, Mar 22 (Reuters) Chinese President Hu Jintao urged Russian President Vladimir Putin today to deepen energy cooperation to include production and processing, a day after signing agreements that could pipe Russian oil into China.

China is keen to boost cross-border energy trade through pipelines, but in a speech broadcast on state television, Hu urged both sides to ''shift the cooperation pattern from the current trade-centered mode to one focusing on production and processing''.

Such cooperation should boost economic development of the two countries while maintaining stability in the international market, Hu told a Sino-Russian economic forum in Beijing.

Hu also urged both sides to heed each other's interests when carrying out energy cooperation and to take a long-term view.

China has been eyeing Russia's vast oil and gas reserves as its dependence on imports has ballooned along with its rapid economic growth, and Putin has made diversifying energy export routes was a top priority.

Putin told the forum yesterday's agreements included one to study the possibility of building a branch pipeline from Russia's oil-rich Siberia to China, the official Xinhua news agency said.

With the project, ''the crude oil supply to China will definitely see an increase'', Xinhua quoted Putin as saying.

Putin held talks with Chinese Premier Wen Jiabao later on today, a day after the giant neighbours agreed to deepen energy cooperation with two new gas pipelines.

Russian gas monopoly Gazprom signed a memorandum yesterday to build two pipelines that could eventually supply China with 60-80 billion cubic metres of gas a year, with first deliveries expected in about five years' time.

Separately, China National Petroleum Corp. (CNPC) will provide credit of up to 400 million to dollars build an oil pipeline to China, the president of Russia's Transneft said on Wednesday.

CNPC, China's dominant state oil giant, and Russian state firm Rosneft plan to build a refinery in China and jointly search for oil in Russia as part of an energy alliance, a CNPC spokesman and an industry source said on Tuesday.

BUY INTO IPO The source told Reuters that CNPC also was in talks to spend billions of dollars to buy into Rosneft's planned IPO, through which it hopes to raise a world-record 20 billion dollars.

Talks between the two countries, which share a 4,300-km (2,700-mile) border and did about 30 billion dollars worth of trade last year, also focused on diplomatic efforts to defuse a nuclear crisis in Iran.

Russian Foreign Minister Sergei Lavrov said today efforts to resolve the Iran nuclear crisis should focus on keeping the Non-Proliferation Treaty intact.

A Chinese Foreign Ministry spokesman said yesterday China and Russia were united in pushing for more diplomacy to resolve the Iranian nuclear issue.

The two sides have deflected Western moves at the United Nations to authorise Security Council threats against Tehran.

Both are also players at six-party talks aimed at dismantling North Korea's nuclear weapons programmes. The negotiations also group the two Koreas, Japan and the United States.

Putin, who opened the ''Year of Russia in China'' yesterday, will attend a Russia-China business forum and meet China's top legislator Wu Bangguo before departing late today.


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