Russia, China sign landmark oil pipeline deal  

AFP reports that the Chinese are taking advantages of their huge foreign exchange reserves and the sagging oil price to chase Russian oil - Russia, China sign landmark oil pipeline deal.

Russia and China on Tuesday signed a long-awaited deal to build an oil pipeline from Siberia to China after talks between Prime Minister Wen Jiabao and Russian counterpart Vladimir Putin.

The leaders watched as Chinese state energy major CNPC and Russian state pipeline monopoly Transneft signed the deal to build the pipeline from the Siberian town of Skovorodino to the Chinese border.

The pipeline agreed on Tuesday would have a capacity of 15 million tons of oil per year and would be a branch of the main East Siberia-Pacific Ocean trunk pipeline, which is still under construction, officials said.

"We should deepen cooperation in the energy sphere. Long-term cooperation will help economic development and stability on world markets," Wen said at the opening of a Russia-China business conference with Putin in Moscow.

Even after lengthy negotiations on energy ties between the two neighbours, Russia is still only the fifth-largest exporter of crude oil to energy-hungry China, despite being the world's number two producer after Saudi Arabia.

Amid lower energy prices, analysts say China is now seizing its chance.

"We have to aim for real results. We've discussed this for many years but the results do not correspond to what they should be for two neighbouring powers," Zhang Guobao, China's top energy official, told the conference.

"We need to build oil and gas pipelines, increase downstream and upstream cooperation and increase cooperation in the nuclear sphere," said Zhang, head of China's State Energy Bureau, speaking through a Russian interpreter.

The length of the pipeline to the Chinese border would be around 70 kilometres (44 miles). The pipeline is then planned to link into the Chinese pipeline network to reach the oil hub of Daqing in northern China.

Russian newspapers on Tuesday also reported that talks were underway for a multi-billion dollar credit from the Chinese government to Transneft and Russian state-run oil company Rosneft that would help boost energy exports.

The Vedomosti daily quoted Sergei Sanakoyev, a government expert, saying Moscow and Beijing had agreed a contract to supply China with 15 million tons of oil per year in exchange for up to 25 billion dollars (20 billion euros).