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Putin hints at China oil pipeline

BBC | March 22 2006

Russian President Vladimir Putin has said a pipeline carrying Siberian oil could be built through China.

If the project goes ahead it would be the biggest trade deal between Russia and China and would cast doubt on an alternative plan to pump oil to Japan.

Energy-hungry China and Japan have been competing for years for a direct link to Russian oil supplies, but Moscow has so far refused to commit to a route.

On Tuesday, China and Russia signed a separate deal to double gas to China.

The deal on the gas pipeline could see China receive up to 80bn cubic metres of Russian gas annually within five years.

Mr Putin is currently visiting China with a 90-member delegation, including business leaders and representatives of Russia's oil and gas industries.

Japanese offer

President Putin's hint that Russia now favours a Chinese route for the oil pipeline will come as a surprise, says the BBC's Quentin Somerville in Shanghai.

The Japanese had offered to pay most of the construction costs and the contract had previously appeared to be going their way, our correspondent says.

Russia stressed on Tuesday that a feasibility study must be completed before a final decision is made on the route of the oil pipeline.

If a deal goes ahead with Beijing, the pipeline will bring 600,000 barrels of oil daily from eastern Siberia to north-eastern China.

Moscow's energy minister told Russian news agency, Tass, that the link to China could be constructed before the end of 2008.

Russia's oil supplies, though plentiful, are not inexhaustible and building a Japanese and a Chinese pipeline is not a likely option, our correspondent says.

 

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