China seeking breakthrough in Russia energy

By Chris Buckley

BEIJING (Reuters) - Chinese Premier Wen Jiabao will seek "breakthrough progress" on long-frustrated energy ties with Russia in talks next week, a senior diplomat said on Tuesday.

Wen will visit Russia from October 27 to October 29 before flying on to Kazakhstan for a meeting of the Shanghai Cooperation Organization of Central Asian states and their neighbours.

Beijing has brandished warming ties with Moscow as a big diplomatic success, and last week the two long-time rivals unveiled boundary markers signifying settlement of a border dispute that sparked armed clashes at the height of the Cold War.

But the two neighbours have had trouble translating public goodwill and handshakes into deals to channel more Russian gas to energy-thirsty China. Beijing wants to get a discount price in return for access to its vast market, but Moscow has an eye on its profits and has alternative customers in the West.

Chinese Vice Foreign Minister Li Hui said this time an energy dialogue could bring real progress to be unveiled at a prime ministerial meeting between Wen and Russia's Vladimir Putin.

"This meeting will feature a broad and thorough exchange of views on deepening cooperation in fields of oil, natural gas and nuclear power," Li told a news conference in Beijing.

"China and Russia both have an extremely positive attitude to promoting energy cooperation."

The results of the energy dialogue will be presented after Wen and Putin meet and will "promote breakthrough progress in energy between the two countries," Li added.

But China has flagged progress in oil and gas negotiations with Russia before, without producing breakthroughs.

Russia's Gazprom (GAZP.MM) has agreed to build two pipelines to China and supply up to 80 billion cubic metres when the links reach their peak capacity. But talks have been slow as the two sides struggle to agree on the price of deliveries.

And more generally, Russian has been wary of tilting its energy flows too strongly toward China, possibly losing customers elsewhere.

But last month, Gazprom said it expects to conclude the pricing talks next year to start gas deliveries in 2013-14.

Wen's meetings in Moscow and Astana, Kazakhstan's capital, will also address global economic turmoil and "play a positive role in overcoming the current financial crisis," Li said.

(Editing by Alex Richardson)