China and Russia are to deepen their existing energy industry cooperation after signing a deal to supply oil to China worth $270 billion over the next 25 years.<\/p>\n
The deal will see the supply of 365 million metric tons of oil to China starting from next month, according to media reports.<\/p>\n
Igor Sechin, the chief executive of Russian state-controlled oil giant Rosneft, was widely quoted after being interviewed during Russia’s annual economic forum in Saint Petersburg, who said deliveries could start as early as this year.<\/p>\n
The oil is likely to be delivered to China via the existing Eastern Siberia-Pacific Ocean oil pipeline that will pump direct into the Chinese region of Mohe in Heilongjiang province.<\/p>\n
The deal was signed on Friday between Rosneft and China National Petroleum Corporation, the country’s largest State-owned oil and gas producer.<\/p>\n
Asked to comment on the report, a source from CNPC told China Daily that the deal had been in discussion for months, since Chinese President Xi Jinping visited Moscow and an agreement was signed in March.<\/p>\n
The source said the price of the deal had been a major sticking point between the nations.<\/p>\n
During his visit to Russia on Thursday, Vice-Premier Zhang Gaoli said that China was keen to work together with Russia to maximize the potential for bilateral economic cooperation.<\/p>\n
Russia has been looking for new markets for its energy exports because of shrinking demand in Europe, its traditional market, said Liao Na, the vice-president of energy consultancy ICIS C1 Energy.<\/p>\n
“The seller and the buyer both have strong willingness to reach the deal provided the price was comfortable for each of them.<\/p>\n
“It is a good timing, considering current international oil prices,” she said, adding that most institutions and commodity consultancies do not expect any dramatic oil price fluctuations.<\/p>\n
She said after the deal was finalized, Rosneft is scheduled to open a refinery in Tianjin in cooperation with a Chinese company, in the second half of the year.<\/p>\n
In 2009, the two countries reached a framework agreement in which Russia would deliver about 70 billion cubic meters of natural gas to China annually for 30 years starting from 2014.<\/p>\n
China, the world’s largest energy consumer, used 145 billion cu m of natural gas last year and will import 78.5 billion cu m of natural gas in 2014, according to data from ICIS C1 Energy.<\/p>\n
Liao said the two countries also have huge potential for cooperation in non-traditional energy sectors, and Russia may become the next major supplier of coal to China.<\/p>\n","protected":false},"excerpt":{"rendered":"
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