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Russia, China Boost Energy Ties During Putin's Beijing Visit

June 26, 2016

Russia and China have signed a number of energy agreements as President Vladimir Putin seeks to boost energy ties with Asia.

The deals were among more than 30 cooperation accords Russian and Chinese companies and regulators signed during Putin's visit in Beijing -- in areas that also included trade, finance, the media, and sports.

Most of the agreements were the framework for deals that must now be finalized.

Rosneft, Russia's top oil producer, committed on June 25 to negotiating the sale of 20 percent of its Verkhnechonskneftegaz unit to Beijing Enterprises Group.

According to Rosneft Chief Executive Officer Igor Sechin, talks on the stake in the East Siberian unit will be completed "soon."

Rosneft also agreed to build a petrochemical plant in Russia's Far East with China National Chemical.

ChemChina would get a 40 percent stake in the Eastern Petrochemical unit.

Rosneft said in a statement that the deal would help the Russian firm finance the project, which the Moscow-based exporter has been seeking to develop for more than five years, and get access to the markets of the Asia-Pacific region.

In addition, Rosneft signed a new one-year supply agreement to ship as much as 2.4 million metric tons of oil to ChemChina.

And Rosneft inked a framework agreement with China Petrochemical Corporation, Sinopec, regarding the construction of a gas processing and petrochemical plant in East Siberia.

The sides aim to set up a joint venture next year focused on the Russian and Chinese markets.

Russia was China's largest crude oil supplier in May for a third month in a row.

Sechin said Rosneft would defend its market position in China, which seeks energy to fuel its economic growth, amid competition with Saudi Arabia, Qatar, Iraq, and Iran.

"We will stick to the volumes we have agreed on," he said. "It's around 40 million tons [per year]."

Also on June 25, the Russian and Chinese central banks signed a memorandum of understanding on setting up a yuan-clearing mechanism in Russia aimed at facilitating cross-border trade and investment.

In the media sector, Putin announced that state-controlled Russian television TV3 will soon begin broadcasts to audiences in China.

The channel focuses on entertainment and is part of the Gazprom Media company.

The Russian president said Russia's state-run news agency TASS and state-run Channel One TV also agreed to develop contacts with their counterparts in China's state-controlled media sector.

Chinese President Xi Jinping called for closer cooperation between news agencies in the two nations so that they could "together increase the influence" of their media on world public opinion.

In the area of sport, Putin said China's Red Star hockey team would begin competing in the Kontinental Hockey League, a Russian-run international professional ice hockey league.

Both Putin and Xi pledged ever-closer cooperation, with the Russian president saying Russia and China "stick to points of view which are very close to each other or are almost the same in the international arena."

Xi emphasized that this year marked the 15th anniversary of the 2001 Sino-Russian Treaty of Friendship and expressed hope that the two countries might remain "friends forever."

With reporting by Reuters, TASS, Interfax, AFP, and Bloomberg

Source: http://www.rferl.org/content/russia- china-boost-energy-ties/27820984.html

Copyright (c) 2016. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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