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Putin in China to secure gas pact

(Agencies)
Updated: 2009-10-12 14:43

Ideal Outcome

"The ideal outcome would be a similar deal to that agreed between China and Russia for oil," Chris Weafer, chief strategist at UralSib Financial Corp., said in a note to clients. "We could see a timeline not only for the pipelines but also for the development of the Kovykta gas deposit."

Gazprom has not yet completed a deal to buy oil producer TNK-BP's stake in Kovykta, an east Siberian field that holds enough gas to supply Asia for five years.

China is also reaching out to landlocked Central Asian producers that until recently were dependent on Russia's pipeline systems to bring their oil and gas to market. CNPC plans to finish building a gas pipeline to Turkmenistan, Central Asia's largest gas producer, this year.

Shanghai Group

The Shanghai Cooperation Organization, whose prime ministers meet in Beijing on Oct. 14, is at risk of becoming irrelevant unless it takes on a greater economic role, said Alexander Lukin, director of the East Asian Studies Center at the Moscow State Institute of International Relations.

Related readings:  Putin's visit to consolidate relations  Putin's China visit to bring $5.5b in deals  Putin might return as Russian president in 2012: reports  Putin remains popular after decade in Kremlin  Russia's Putin dives for gas crystals in deepest lake

At the organization's last meeting in June, Hu said China would supply member countries with $10 billion in credits to help weather the financial crisis. Besides Russia and China, the group comprises Kazakhstan, Uzbekistan, Kyrgyzstan and Uzbekistan.

Pyongyang Issue

Putin comes to China a week after Wen, on a visit to Pyongyang, won a conditional agreement for the Democratic People's Republic of Korea's return to six-party negotiations, which include Russia, aimed at eliminating Pyongyang's nuclear weapons program. Russia and China have been Pyongyang's closest partners during the past six decades.

While Russia and China face a "delicate balance" where their interests overlap in Central Asia, the two former Cold War rivals have more that binds than divides them, said Zhu Feng, a Peking University professor who specializes on international security issues.

"The two countries are cautiously but passionately pushing ahead for greater cooperation," Zhu said. "Oil shipments are a very strong economic bond."

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