China, Russia in Energy Deals

China, Russia in Energy DealsChina, Russia in Energy Deals

Russia and China sealed a raft of energy deals during President Vladimir Putin's visit to Beijing last week.

The deals involve the sale of stakes in a number of Russian projects to Chinese firms, an oil supply contract and joint investments in petrochemical projects in Russia, Reuters reported. Rosneft, Russia's top oil producer, agreed with China National Chemical Corporation that ChemChina would take a 40% stake in Rosneft's planned petrochemical complex VNHK in Russia's Far East.

The deal would help Rosneft finance the project and get access to the markets of the Asia-Pacific region, the Russian firm said in a statement.

They also signed a new one-year contract under which Rosneft could supply up to 2.4 million tons of crude oil to ChemChina between Aug. 1, 2016, and July 31, 2017.

Rosneft and Beijing Enterprises Group Company Limited agreed the key terms of a potential sale of a 20% stake in Rosneft's oil producing subsidiary, Verkhnechonskneftegaz, to a unit of Beijing Gas Group.

The Russian firm also signed a framework agreement with Sinopec regarding the construction of a gas processing and petrochemical plant in East Siberia, aiming to set up a joint venture in 2017 focused on the Russian and Chinese markets.

Rosneft CEO Igor Sechin said his company did not plan to reduce its crude supplies to China and would defend its market position amid competition with Saudi Arabia, Qatar, Iraq and Iran.

"We will stick to the volumes we have agreed on. It's around 40 million tons (per year)," TASS news agency quoted Sechin as saying. Russia was China's largest crude oil supplier in May for a third month in a row, having surpassed imports from Saudi Arabia.