From AFP:
Russia and China on Tuesday signed a long-awaited deal to build an oil pipeline from Siberia to China after talks between Prime Minister Wen Jiabao and Russian counterpart Vladimir Putin.
The leaders watched as Chinese state energy major CNPC and Russian state pipeline monopoly Transneft signed the deal to build the pipeline from the Siberian town of Skovorodino to the Chinese border.
The pipeline agreed on Tuesday would have a capacity of 15 million tons of oil per year and would be a branch of the main East Siberia-Pacific Ocean trunk pipeline, which is still under construction, officials said.
“We should deepen cooperation in the energy sphere. Long-term cooperation will help economic development and stability on world markets,” Wen said at the opening of a Russia-China business conference with Putin in Moscow.
Read also: Russia Swaps Oil For Chinese Cash by Lionel Lauren in the Forbes:
During difficult times, emerging markets can help each other out: China and Russia signed a deal to build an oil pipeline between the two countries on Tuesday, amid speculation that China would grant a loan of around $25 billion to Russian oil companies as part of a renegotiated supply deal.
Although the new supply deal has long been expected, Russia is facing added pressure from the financial crisis and the falling price of oil. That means it is likely to offer China oil supplies at a discount in an effort to secure much-needed funds for infrastructure investment and capital expenditure. For Russian oil major Rosneft (other-otc: RNGZY – news – people ), that could be a big breath of fresh air.
