Energy cooperation between China and Russia
中国和俄罗斯之间加强能源合作

One topic at this year’s Asia Pacific Economic Cooperation meeting is energy trade between Asia and Russia. China signed a $400 billion gas supply deal with Russia in May. But there may be problems ahead, with reports that China may not be willing to put up the investment that Russia wants to develop its energy resources.

The much hailed natural gas deal would see Russia supply China with around 38 billion cubic metres

of gas annually for thirty years. Construction of the ’Power of Siberia’ pipeline is due to start in 2015, with supplies due to start in 2017.
It’s part of big potential investments that Russian state energy giants Gazprom and Rosneft might make in seeking eastern energy markets.

But Russia needs money for this. Last year China’s National Petroleum Corporation reportedly agreed to a $70 billion prepayment to Rosneft as part of a 25-year supply deal. Elsewhere, there are problems.

Questions are being raised about how secure the $400 billion gas deal really is. The Russian government, faced with sanctions, a plummeting rouble and capital flight is struggling with its budgets. Chinese banking officials say that although they want to develop business in Russia.

One part of the agreement that was trumpeted by Moscow was a $25 billion prepayment that it said China was putting towards construction of the pipeline.

From currency swaps to high-speed rail projects, anti-aircraft missiles and joint energy projects, there are many China-Russia business opportunities being touted.

But Chinese investment in Russia still remains a fraction of the estimated $134 billion of external debt Russian companies have to repay by the end of 2015, most of that to US and European banks.