Russia, China discussing credit schemes for oil, gas supplies - Russian Deputy Prime Minister

Russia and China are discussing the possibility of taking out loans for oil and gas supplies, Russian Deputy Prime Minister Arkady Dvorkovich told reporters.

"A credit scheme is being discussed with regards to oil and gas," he said.

Dvorkovich stressed that final agreements will be reached after negotiations between the Russian and Chinese leaders, which are to be held at the end of this week.

He did not rule out the potential signing of agreements between Russia and China during a visit by a Chinese delegation.

Russia currently sends 15 million tonnes of oil to China a year via a branch off of the Eastern Siberia-Pacific Ocean (ESPO) pipeline. The 20-year contracts for these supplies were signed with Rosneft and Transneft  in 2009, and deliveries kicked off on January 1, 2011. In exchange for the long-term contracts, Rosneft received a $15-billion loan from Chinese banks, and Transneft received $10 billion.

China has several times raised the question of ramping up oil supplies from Russia. During a recent visit to Beijing by Rosneft President Igor Sechin, agreements were reached on substantially increasing shipments of Russian oil to China. After a meeting of the Russian-Chinese energy cooperation commission, Dvorkovich said that Rosneft may supply China with an additional 9 million tonnes of oil per year for the implementation of the Tianjin oil refinery project.

Furthermore, during the latest round of the Russian-Chinese energy dialogue, presided over by Dvorkovich, China brought up the topic of prepayment for Russian gas supplies. In particular, discussion is under way regarding a $40-billion advance payment for gas supplies.

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