Russia and China pen pipeline deal
China and Russia have signed an energy agreement, estimated at billions of dollars in commercial deals, including the building of an oil pipeline and supply of fuel the expanding Chinese market. China and Russia have agreed to a package of deals on oil pipeline construction, crude oil trade and financing and other projects pertaining to oil cooperation. Reports from Russia remark the sides agreed to a 23-year deal to pump Russian oil to the Chinese market, in return for $25 billion (€19 billion) in loans from China to Russian oil firms to finance the pipeline. Russia will supply China with 15 million tonnes of crude annually during the period of the deal. China has scrambled to come to an agreement with Russia since oil prices fell late last year due to the financial crisis, after years of negotiating the pipeline construction and a timetable for crude deliveries. Meanwhile Russian oil producers have been hit hard by the crisis, with the nation's largest producer Rosneft seeing net profit fall 64.4% in the Q4 2008 due to a drop in oil prices and high tax rates. Russian oil major Transneft had said at an earlier stage of the negotiations in February that it had agreed to a 20-year deal to pump Russian oil to China. The construction of the oil pipeline from Russia's far east to refineries in China's northeast will start at the end of April and will be completed by the end of 2010. The pipeline is a spur of the East Siberian-Pacific Ocean pipeline that is currently under construction and will transport Russian crude from Siberia to a terminal on its eastern coast.