China, Russia draw closer with pipeline pact

SHANGHAI, China - An agreement between China and Russia on a pipeline from Siberia to supply oil to China's northeast has raised expectations that the long-delayed project will finally go ahead.

The pipeline pact was among numerous agreements witnessed by Chinese Premier Wen Jiabao and his Russian counterpart, Vladimir Putin, during a visit by Wen to Moscow on Tuesday.

Details of the agreement were not disclosed, but Russian media reports said Moscow's agreement to move ahead on the long-delayed project likely was won with pledges of financial support from Beijing.

Winning a nod of support from Moscow is a coup for Beijing, which has lobbied hard to ensure that a branch of the East Siberia-Pacific Ocean pipeline, meant to supply markets in eastern Asia, will extend into China.

The pipeline, which extends from western Siberia to the Pacific coast, is to be connected to China from the Siberian city of Skovorodino, 70 kilometers (44 miles) north of the Sino-Russian border.

Russia and China were rivals during much of the Cold War but have forged closer political and military ties since the Soviet collapse, seeking to counter U.S. geopolitical power.

Increasingly squeezed by the global credit crunch, Russia hopes for China's financial support and investment, while resource-scarce China is keen to expand energy imports from oil and gas-rich Russia.

In remarks carried by the official Xinhua News Agency, Wen listed cooperation on resource development first among five proposals for economic cooperation with Russia.

"Energy cooperation is an important part of the China-Russia strategic partnership," said a statement issued after Wen's meetings with Putin. "The two sides support deepening cooperation in developing oil and gas resources."

China is keen to expand its imports of gas and oil by pipeline, given the higher costs of shipping by rail. But discord over pricing and environmental issues have slowed progress on the pipeline.

Plans call for the pipeline to carry 15 million tons of crude oil to China annually, the ITAR-Tass news agency reported.

It cited a statement on the Web site of Russian pipeline monopoly Transneft that said feasibility studies were under way. It remains unclear when the project would come on line.

Apart from the pipeline agreement, the two countries agreed to extend cooperation in oil production and processing, natural gas production and in chemical industries, Xinhua reported.

After his talks with Wen, Putin underscored Moscow's eagerness to see Chinese invest in various industries, including construction, timber, machine-building and aviation. He also urged Chinese companies to bid on projects associated with the 2014 Winter Olympics in the Black Sea resort of Sochi.

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