Oil and Gas

Russia flags nuclear energy deal with China

BEIJING (Reuters) - Top Russian energy officials may sign a cooperation agreement on nuclear power with China during President Dmitry Medvedev’s visit this week, Russia’s ambassador in Beijing said on Tuesday.

Medvedev, who took over the presidency from his mentor Vladimir Putin earlier this month, will meet with President Hu Jintao and other senior Chinese leaders during a two-day state visit starting on Friday.

Russia has forged close ties with Beijing and is eager to boost exports of oil, gas and nuclear products to China, which is desperate to secure energy for its booming economy.

The delegation, which will also include Russia’s new energy minister Sergei Shmatko, a former nuclear plant salesman, may yield an agreement on nuclear power cooperation, Sergey Razov said, without elaborating.

“I cannot disclose what project, because it is under discussion. But it is a big possibility that it will be signed (during the visit),” Razov said.

Russia’s atomic energy agency in November said its building contractor Atomstroiexport had signed deals to build two more nuclear reactors for China’s Tianwan power station in coastal Jiangsu province, where it finished building two reactors this year.

The preliminary deals did not set a time frame or price, but they are potentially worth several billion dollars.

“The cooperation in the Tianwan nuclear plant has brought many fruitful results. So I think there is great potential for further cooperation,” Razov said.

China plans to install 40,000 gigawatts of nuclear power generating capacity by 2020, an investment of $50 billion in 30 reactors across the country.

Razov indicated that little progress, however, would be made on long-running disputes over gas prices that have held up work on two planned pipelines to transport the fuel to China.

“In terms of gas pipelines, as far as I know, the two countries will not sign any new documents,” Razov said.

Eventually, under a deal signed last year, two pipelines either side of Mongolia could deliver China up to 80 billion cubic meters of gas a year.

Beijing, which holds its gas prices below international market levels, wants to buy the fuel at levels closer to Russian domestic prices, but Russia’s monopoly supplier Gazprom has demanded the gas export price be comparable with that for supplies to Europe.

Reporting by Ian Ransom; Editing by William Hardy