Nov. 23 (Bloomberg) -- China and Russia agreed to expand oil, coal and nuclear power cooperation as economic growth in the Asian country drives energy demand while talks continued on gas pricing to start exports.
The neighboring countries are unlikely to reach a price agreement before mid-2011, Russian Deputy Prime Minister Igor Sechin said today in St. Petersburg where Chinese Premier Wen Jiabao met his counterpart Vladimir Putin.
Wen is meeting Russian leaders this week as the countries seek to deepen cooperation in technology, finance and energy. Bilateral trade will probably exceed $50 billion this year, the official Xinhua News Agency said yesterday. Russia is seeking to expand beyond European markets, where the financial crisis and growing competition have hampered demand.
Talks between OAO Gazprom, Russia’s gas export monopoly, and China National Petroleum Corp. on supplies to the Asian nation are proceeding “successfully,” Putin told reporters after the meeting with Wen.
Russia’s nuclear power plant builder, ZAO Atomstroyexport, signed a contract to construct a third and fourth nuclear reactor at China’s Tianwan complex, at a ceremony presided over by Wen and Putin. Wen is scheduled to meet with President Dmitry Medvedev in Moscow tomorrow, the Kremlin said on its website.
Russia will start export supplies of crude to China through a pipeline on Jan. 1, the Ministry of Foreign Affairs in Beijing said in a statement on its website today. The mission to Russia follows Medvedev’s visit to China in September during which he and President Hu Jintao launched the cross-border oil pipeline.
The countries may be able to discuss “concrete parameters” for a commercial gas contract in the middle next year, Sechin said. Gazprom had aimed to send its first supplies to China by pipeline in 2011, a goal that has been postponed as the countries fail to agree on pricing.
The price gap that Russia and China aim to close about $100 per thousand cubic meters, Gu Jun, deputy director-general of the international department at China’s National Energy Administration, said on Nov. 18. Gazprom estimates the gas price for Europe this year will average $308, Deputy Chief Executive Officer Alexander Medvedev said on Nov. 8.
Coal imports from Russia may exceed 12 million metric tons this year, the Chinese foreign ministry said, without giving a comparative number.
China overtook Germany as Russia’s second-largest trading partner in the first six months, helped by exports from Russian commodity producers including United Co. Rusal and OAO GMK Norilsk Nickel.
OAO Rosneft plans to expand cooperation with CNPC through an upstream venture and will consider joint acquisition of assets in Russia and abroad, both offshore and onshore, the Moscow-based company said.
The world’s fastest-growing major economy started allowing the yuan to trade against the Russian ruble from yesterday to help internationalize the Chinese currency. The yuan will start trading on Russian exchanges at the start of December, Putin said today.
Regulators have already permitted the yuan to trade in China against the dollar, euro, yen, British pound, Hong Kong dollar and Malaysian ringgit.
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