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Update: Russia, China sign $25b energy deal

(Agencies)
Updated: 2009-02-17 20:01

Russia and China signed a $25 billion energy deal in Beijing on Tuesday that will see China secure oil supplies from Russia for the next 20 years in return for loans, Russia's state pipeline monopoly Transneft said.

As part of the broad energy supply deal, China will lend $15 billion to Rosneft, Russia's state-owned oil major, and $10 billion to Transneft, a vital boost for energy companies as they struggle to raise capital amid straitened lending conditions and plunging oil prices.

In return, Russia promised to guarantee annual oil supply of 15 million tons (300,000 barrels per day) for 20 years to its energy-hungry neighbor.

Igor Dyomin, Transneft's press spokesman, confirmed the outline of the deal.

The signing ceremony marks an end to months of talks between the neighbors after negotiations broke down amid disagreements over interest rates and state guarantees.

Russian crude will be supplied through a long-delayed pipeline project agreed to late last year. The pipeline, which extends from western Siberia to the Pacific coast, is to be linked to China from the Siberian city of Skovorodino, 70 km north of the Sino-Russian border.