Beijing, May 29: China today welcomed the signing of the USD 150 bn oil pipeline deal with Russia, the biggest-ever bilateral economic project, saying that it shows the "very deep mutual trust" between Beijing and Moscow. The joint energy projects will further promote Sino-Russian strategic partnership of cooperation, Chinese foreign ministry spokeswoman Zhang Qiyue said here.

The agreement was signed yesterday between Russia's Yukos oil company and China National Petroleum Corporation on the main principles and understandings for 25-year-long contract to supply oil to China via a China-Russia oil pipeline.

Zhang said China would work together with Russia to carry out the oil pipeline project to benefit the people of the two countries.

She also pointed out that bilateral trade volume had increased for four consecutive years and last year it jumped to a record-breaking 12 billion US dollars.

The Sino-Russian agreement, inked as part of the ongoing state visit of Chinese President Hu Jintao to Russia, would help China to reduce dependence on oil from the Middle East.

The general manager of China National Petroleum Corporation (CNPC) Ma Fucai said the supplies would begin in 2005 and volumes would be 20 mn tonnes annually during the first five years and 30 mn tonnes annually from 2010 onwards.

Xinhua reported that the deal would be worth USD 150 bn and the Russian side stood to receive about USD 60 bn.

The Russian government has decided to build a key oil pipeline from Angarsk in western Siberia to Nakhogka in the Pacific coast on the Sea of Japan, with a 2,400 km separate branch going to the northern Chinese oil city of Daqing.

Bureau Report