March 20 (Bloomberg) -- Chinese President Hu Jintao may seek agreements for Russia to increase shipments of oil and gas to the world's most-populous nation when President Vladimir Putin visits Beijing tomorrow.

Hu wants an $11.5 billion oil pipeline from eastern Siberia to the Pacific coast port of Nakhoda to include a spur going into China, the world's second-biggest oil consumer. Russia is scheduled to start building the pipeline this year.

China is seeking to secure long-term supplies for the world's fastest-growing major economy. Putin may be willing to offer Hu some of what he wants in order to win Chinese military equipment orders and investment in Russian technology companies as part of an effort to diversify the nation's economy away from natural resources.

``Putin has to put something on the table now, either the direct pipeline to China or a stake in a state oil company, to get the investments he wants from the country,'' said Chris Weafer, chief strategist at Moscow-based Alfa Bank.

Putin, ruler of the world's largest oil and gas producer, will begin a two-day visit starting tomorrow. Discussions with Hu on the first day probably will address energy and military relations as well as Iran and North Korea.

The following day, the two will meet with some of Russia's most senior energy officials, including Energy Minister Viktor Khristenko, OAO Rosneft Chief Executive Officer Sergei Bogdanchikov, OAO Gazprom Chief Executive Officer Alexei Miller and OAO TNK-BP Executive Director Viktor Vekselberg.

China and Russia will sign three energy-related agreements in Beijing tomorrow, Chen Geng, president of state-owned China National Petroleum Corp., said in Hong Kong, without giving details.

Crude Supplies

China National Petroleum is ``fully confident'' that Russia will extend a planned oil pipeline to the Asia Pacific region to China, Chen said in an interview with Interfax.

Russia ships only about 3 percent of its crude exports to the Asia-Pacific region and is seeking to boost that figure. The pipeline to Nakhoda is a central part of that effort.

Putin assured Japan's senior vice trade minister Akira Nishino during talks at a Group of Eight nations summit in Moscow the oil pipeline would eventually be built to the Pacific coast for export, Hideji Sugiyama, Japan's vice trade minister, said today. Energy ministers from the Group of Eight nations focused on ensuring fuel supplies at their meeting on March 15 and 16.

Japan Cooperation

Japan, Asia's second-largest oil consumer, and Russia would cooperate to ensure the development of oil reserves in east Siberia to allow for the pipeline to be extended, Sugiyama cited Nishino as saying. Sugiyama said he didn't know when Japanese companies would start exploration and development in the area.

Russia provides about 9.2 percent of China's oil needs. China gets more than 40 percent of its energy supplies from the Middle East and wants to diversify its sources.

``Putin holds all the cards,'' said Marshall Goldman, a director of Harvard University's Davis Russian Studies Center. ``The Chinese are going to pressure him. They want to lock up that petroleum.''

Improving economic, military and political relations between the two countries haven't helped China get better access to Russian energy in recent years.

Chinese state oil companies were locked out of bidding for Russian oil producer OAO Slavneft in 2002 and the nation has yet to get a stake in a Russian oil field or company.

State-controlled Gazprom has hampered TNK-BP's plans to construct a gas pipeline to China while Russian officials have issued contradicting statements on building the extension to China. The two nations' companies are battling for influence and assets in the energy industry in Central Asia.

Internal Conflict

``There is a lot of conflict inside Putin's administration on how to deal with China and a decision on the oil pipeline will be made based on the interests of the nation's `mega corporations,' not economics,'' said Nikolai Zlobin, a Russia analyst and director of the Washington-based World Security Institute.

State-controlled companies such as Rosneft, Russia's second-largest oil producer, OAO Transneft, its oil-pipeline monopoly, and OAO Russian Railroads, the largest rail network outside the U.S., are among the nation's biggest companies that could benefit or lose from an extension. Russian Railroads Chief Executive Vladimir Yakunin and Rosneft Chairman Igor Sechin are close friends of Putin.

The Russian president may have to make a decision on the pipeline extension within the next 18 months as his term comes to an end, Zlobin said. Putin must step down in March 2008 after completing his second consecutive term, according to the constitution.

To contact the reporter on this story: Todd Prince in Beijing at tprince2@bloomberg.net.

Last Updated: March 20, 2006 04:45 EST