The Hindu : International : China fails to win Russian pledge on oil pipeline

Online edition of India's National Newspaper
Tuesday, Jul 05, 2005

International

International

China fails to win Russian pledge on oil pipeline

Vladimir Radyuhin

MOSCOW: Chinese President Hu Jintao's visit to Russia has strengthened strategic partnership between the two countries to a new high, but failed to secure firm Russian commitment to drastically increase oil supplies to China.

"Political trust between Russia and China has been raised to a new level," said a joint communique issued at the end of Mr. Hu's visit on Sunday. "Relations of partnership and strategic cooperation are entering a new stage in their development."

Rising trade

The statement also said bilateral partnership was "a priority direction" for both countries. Two-way trade last year crossed a record $21 billion and is expected to jump to $60 billion to $80 billion by 2010.

At the same time, the Chinese leader failed to achieve the main goal of his visit — securing Russian commitment to build an oil pipeline to China.

The joint communique said only that the sides will "facilitate Russian-Chinese hydrocarbon projects, including the construction of an oil pipeline from Russia to China," and "instructed enterprises in both countries to carry out concrete consultations on the above projects."

China, whose oil consumption increased 15.8 per cent last year and is set to grow another 6 to 8 per cent this year, is locked in fierce competition with Japan for access to Russian energy reserves. Last year, Moscow decided to construct a pipeline to Russia's Pacific coast for export to Japan, but said it will also build a side route to China.

However, Mr. Hu's visit has not brought any clarity on this issue. Meanwhile, China's Sinopec oil company signed an important protocol with Russia's Rosneft on joint exploration and development of an oil-and-gas block in the Sakhalin-3 project, which is also eyed by India. Rosneft also agreed to increase oil shipments to China by rail from 4 million tonnes in 2004 to 9 million tonnes in 2005.

Absence of progress on an oil pipeline to China may reflect Russia's displeasure with Beijing's reluctance to diversify its commodity-dominated imports from Russia to include machines and equipment.

China has also been dragging its feet over supporting Russia's joining of the World Trade Organisation.

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