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Chinese leader Xi, Putin agree key energy deals
by Staff Writers
Moscow (AFP) March 22, 2013


China's new leader Xi Jinping and his Russian host, President Vladimir Putin, on Friday oversaw the signing of a raft of energy and other agreements as they sought to further tighten their countries' already close partnership.

Xi, who is on his first foreign trip as president, hailed "breakthrough agreements" and said he and Putin had agreed on a deal that will see Russia, the world's largest energy producer, increase oil supplies to China, the world's biggest energy consumer.

"Russian-Chinese energy cooperation is all-encompassing, full-sized and comprehensive," Xi said at the Kremlin after talks.

"We can already say this is a historic visit with positive results," Putin added after he and Xi presided over the signing of an agreement between Russian oil company Rosneft and China's state-owned CNPC.

Rosneft chief Igor Sechin told reporters the agreement would see Russia gradually raise supplies over the next 25 years from their current level of 15 million tonnes. At their peak the supplies are tipped to increase by 31 million tonnes a year.

As part of the deal, Rosneft is to receive a $2.0 billion loan from China, he said, noting that a finalised accord would be signed at a later stage.

Russia, which wants to diversify its energy markets away from Europe, also needs to finalise a potentially huge gas deal with China but a commercial contract has so far proved elusive as talks have become mired in pricing disputes.

Gazprom chief Alexei Miller told reporters that a legally binding document would be signed in June, and added that the company expected to sign the final contract by year's end.

In the Kremlin, Gazprom signed a preliminary agreement paving the way for the future 30-year contract. According to the deal, Russia will begin sending gas to China in 2018, before increasing those supplies to up to 60 billion cubic metres.

Xi, who arrived in Russia along with first lady Peng Liyuan, said he was keen to work together with Putin to develop "strategic cooperation," stressing his personal rapport with the Russian strongman and calling him his "old friend."

"We always treat each other with an open heart," said Xi at the start of the talks, before adding: "We are good friends."

Xi will preside over the world's second-largest economy for the next 10 years.

Putin and Xi fist met in 2010 when the Chinese leader, then in the rank of vice-president, travelled to Moscow for talks.

On Friday they signed a declaration sealing their two countries' cooperation and pledging to coordinate international moves.

Once bitter foes during the Cold War, Moscow and Beijing have boosted cooperation in recent years to counterbalance US global dominance.

At the UN Security Council, China and Russia have both vetoed resolutions to impose sanctions on Syrian President Bashar al-Assad's regime, which is locked in a bloody two-year conflict with the opposition.

Earlier in the day, Russian Deputy Prime Minister Dmitry Rogozin and his Chinese counterpart Wang Yang also oversaw the signing of a number of deals.

Those agreements included a $2.0 billion deal involving the Russian energy firm En+ Group and China's largest coal company Shenhua Group to develop coal resources in Russia's Far East.

Experts say that Xi and Putin will use the three-day visit to try and map out a cooperation plan for the next 10 years.

"Essentially we are talking about a new epoch in relations between Russia and China," said Sergei Sanakoyev, a veteran China expert with links to the Russian government.

Xi's first overseas trip will then take him to Africa to shore up his resource-hungry country's soaring influence on the continent with visits to Tanzania, South Africa and the Democratic Republic of Congo.

Russia and China are members of the BRICS grouping of emerging economies, which includes Brazil, India and South Africa and which will hold a summit in South Africa next week attended by both Putin and Xi.

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