China may lend Russia $25 bln as part of oil deal

MOSCOW, Oct 27 (Reuters) - Russia and China will sign a much-delayed long-term oil supply deal on Tuesday and Beijing is in talks to lend Russian companies $20-$25 billion in export-backed loans, industry sources said on Monday.

The deal will give Beijing access to 300 million tonnes of Russian oil over the next 20 years, accounting for 4 percent of its annual demand, while allowing Russian firms to sort out immediate financing needs during an acute liquidity squeeze.

The deal will be on the agenda when Chinese Premier Wen Jiabao meets Russian officials on Tuesday. The Kremlin is seeking to diversify its export routes away from the West and is targetting China as the main market for its East Siberian oil.

"It is a huge deal. The biggest ever between Russian and Chinese oil firms," said one source with the knowledge of the situation.