Russia energy ties sans gas deal

Vladimir Radyuhin

Moskow: Russia and China have agreed to increase bilateral trade to $200 billion by 2020 and vowed to build “strategic” ties in energy even as they continue to wrangle over the price of Russian gas.

The two countries will strive to boost two-way trade to $100 billion by 2015 and to $200 billion by 2020, said a joint statement signed on Thursday by Presidents Dmitry Medvedev and Hu Jintao to commemorate the 10th anniversary of a friendship treaty. The Chinese leader is paying a two-day visit to Russia after attending a summit of the Shanghai Cooperation Organisation in Kazakhstan.

China is already Russia's biggest trading partner, with bilateral trade soaring 50 per cent last year, to $59 billion. By comparison, India's trade with Russia stood at $8.5 billion in 2010 and is projected to grow to $20 billion by 2015.

Russia and China decided to “form long-term strategic energy partnership” in oil, gas, nuclear, coal, electricity and renewable energy.

However, the two countries failed to sign, as expected, a mega deal for the supply of Russian gas to China. After two years of hard-nosed bargaining, the sides still cannot agree on the price, with Russia insisting on a “market price”, close to what Russia charges its customers in Europe, — $352 per 1,000 cubic metres of gas — whereas China is not prepared to pay more than $235.

Under a 2009 agreement Russia is to build two pipelines to China to supply a total of 68 billion cubic metres of Siberian gas a year from 2015 to 2030.

Earlier this year Russia started pumping oil along a newly built pipeline to China under a contract to supply 300 million tonnes of crude through 2030.

West Asia situation

Russia and China said they were opposed to foreign interference in the Arab world and “willful” interpretation of United Nations resolutions on Libya.

The two countries called for peaceful settlement of conflicts in West Asia and North Africa by “launching broad national dialogue about rebuilding stability and social order and the promotion of democratic and economic reforms,” said a joint statement.

The Russian Foreign Ministry on Thursday reiterated Moscow's opposition to any U.N. resolution on Syria.

The Russian and Chinese leaders also voiced “concern” over the situation in war-torn Libya.

They urged an early ceasefire in Libya and politico-diplomatic settlement. They vowed to pursue “joint efforts in the U.N. Security Council” and support the African Union peace initiatives for Libya.