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Russia and China today signed a raft of agreements over energy issues but failed to announce any deal on a key pipeline to deliver oil from Russia, the world’s second largest producer, to China, the second largest consumer.
The announcements came as Vladimir Putin, the Russian President, visited Beijing and coincided with diesel rationing by two of China’s biggest oil suppliers, a move that underscored the pressure on supplies and prices in China.
The Times reported today that the rationing appeared to have been restricted to the south-eastern provinces of Zhejiang and Jiangsu, two hotbeds of Chinese economic growth.
Large queues grew at petrol pumps on speculation that Beijing is preparing to increase petrol and diesel prices. Widespread shortages hit China in August after supplies were stretched to breaking point.
The key to China's energy problems are seen as resting in the hands of Russia. Mr Putin and Hu Jintao, his Chinese counterpart, were expected to discuss Russia’s East Siberia-Pacific oil pipeline during the visit. The project has been beset by wrangling between Japan and China over which country benefits first from improved access to Russian oil.
Today, there appeared to be no step forward, with Russia committing itself only to a further feasibility study.
There was also a "protocol" agreement between Russia’s state-owned oil pipeline monopoly, Transneft, and China National Petroleum Corporation (CNPC), but few details on what action would take place.
A joint statement from the two leaders added: "Energy leaders and companies of the two countries will continue active work on establishing pipeline projects for delivery of crude oil and natural gas from Russia to China."
However, there was significant progress on Russian gas supplies to China, as the countries signed a deal to build two gas pipelines. The deal between Russia's Gazprom and China’s biggest energy firm, CNPC, was one of 15 agreements signed on the first day of Mr Putin’s two-day visit.
The gas pipelines, which are each envisaged to supply China with 30 to 40 billion cubic metres of gas annually, will go online in five years, the Gazprom chief executive said.
"Today in fact we have determined the time frame and the scale," Alexei Miller said. "We are talking about large-scale deliveries."
One of the pipelines will be around 1,860 miles (3,000km) long and approach from Russian territory to the west of China, while the other, to come online in a second stage, will enter from the east.
Pricing formulas had yet to be worked out in detail, but the two countries were in the commercial phase of discussions on "conditions for purchase on the basis of world prices," Mr Miller said.
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