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Putin fails to satisfy China's hunger for energy
China and Russia signed a broad deal to strengthen energy relations today, agreeing to build two giant gas pipelines, but stopped short of confirming the construction of a crude oil pipeline desperately wanted by Beijing to answer the country's energy needs.On his fourth visit to Beijing in five years, President Vladimir Putin met President Hu Jintao and agreed a long-term strategy of energy co-operation intended to bind ever more tightly the world's second largest energy producer to the second largest consumer. In tune with the intense cordiality of the meeting - this is the "Year of Russia" in China and 2007 is the "Year of China" in Russia - the two sides agreed to build two long-anticipated pipelines to bring between 60 and 80 billion cubic metres of natural gas every year from Russia's gasfields to China's factories. Alexei Miller, the chief executive of Gazprom, the Russian gas giant, said that the first deliveries were expected in five years. The Interfax news agency quoted a member of the Russian negotiating team saying the pipelines would cost around $10 billion (£5.7 billion). "This about diversifying supplies. Today weve defined the timeframe and volumes for Gazproms entry on to the Chinese market. These are major volumes," said Mr Miller. Among 15 financial deals signed by the governments, a separate commitment was also made to increase co-operation and the refining capacities of the China National Petroleum Corporation (CNPC), the Chinese oil and gas monopoly, and Rosneft, the Russian oil company. But progress on an $11.5 billion (£6.6 billion) crude oil pipeline that aims to connect Siberia and the great Asian energy consumers of China, South Korea and Japan, remains held up by environmental and planning concerns in Russia. Viktor Khristenko, the Russian Energy Minister and one of an entourage of 90 politicians and Russian industrialists accompanying Mr Putin to China, said that it was still to early to set a date for the completion of the project, which will carry 600,000 barrels of oil a day. "We will only be able to answer that once weve done the feasibility study," he said. "We intend to build it. There is nothing forbidding it, but first there should be a feasibility study according to the rules." The slow planning process and the lack of movement in international negotiations over the pipeline -- which are believed to hinge on the financial contributions each country is willing to make -- prompted China's top energy planner, Zhang Guobao, to make unusually blunt remarks ahead of Mr Putin's visit earlier 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," he said. Some oil analysts have also questioned whether Russia has the resources in Siberia to justify the pipeline and whether Mr Putin is using the project as a bargaining chip in his negotiations with Russia's European energy customers. "I dont see where Russia in the foreseeable future can pile up these resources," Valery Nesterov, oil and gas analyst at the Troika Dialog investment bank in Moscow told the Associated Press. "Russia is saying it has markets. In a way, its a form of pressure on Europe." In comments on international relations, Mr Putin and Mr Hu affirmed their commitment to seeking a diplomatic resolution to the Iran's nuclear confrontation with the UN. Both countries have acted to soften the stance taken by the EU and the America towards Tehran. Posted by: ryuge 2006-03-21 |
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