Wen Jiabao in Russia and China's thirst for petroleum

Moscow (AsiaNews/Agencies) - Chinese Premier Wen Jiabao arrived in Moscow yesterday, where he met with Russian Prime Minister Mikahil Fradkov.  The purpose of his mission is to secure from Russia greater gas and petroleum suppliers for China and to reach a definitive agreement on the route of a Siberia/China pipeline, which the two parties have been discussing for years.

This week, shortly before Wen Jiabao's departure, the Russian petroleum giant Yukos decided to suspend the supply of 400,000 tonnes of crude oil per month -- in other words, 60% of total exports to China - to the state-run China National Petroleum and Co. (CNPC).  Yukos said the decision was due to "high transport costs expected for October" (Editor's note: transport is principally by rail).  The date for supply cuts to begin has not yet been set and China is doing whatever it can to avoid them.  Yesterday, Chinese Railways Minister Liu Zhijiun met with Steven Theede, chief executive of the Russian company.  At the end of the meeting, Theede announced that to resolve the problem, China has undertaken to pay next month's supplies in advance.  Beijing is aiming not only to re-establish supplies from Russia but also to increase them.  On the eve of his trip, Wen Jiabao had stated that he wanted to reach 15 million tonnes of crude oil within 2006.

Wen also hopes to convince Russia to reconsider the route of the planned Siberian pipeline.  Moscow has set the starting point at the city of Angarsk in Siberia, a region rich in oilfields, and plans to extend it east toward Nakhodak, for onward sea shipments to Japan and other destinations.  Beijing has been trying to persuade Russia for over a decade to have the pipeline arrive in Daqing, in the province of Heilongjiang (northeast China).  Japan has been lobbying Moscow to make a secondary branch to Daqing.  "We are confident," Wen Jiabao stated, "that the Russian government and plants will give priority to a pipeline to China, which is the most sustainable market for Russian oil and gas."

In exchange, the premier is offering to collaborate with Russia on nuclear energy.  Wen's proposal is to entrust Moscow with the construction of various plants in China and to launch a Chinese investment plan in Russian energy industries for a sum of over 12 billion dollars U.S.

• CHINA
• RUSSIA
• ECONOMY
• ENERGY
• DEFICIT
• LACK
• OF
• ENERGY
• ECONOMIC
• GROWTH
• OIL
• CRISIS