CHINA, RUSSIA SIGN OIL, GAS DEALS

June 27, 1997

BEIJING (AP) -- China and Russia signed a multibillion-dollar oil and natural gas deal Friday, as well as an agreement easing railroad travel between the two countries.

The agreements, part of a series of trade-boosting measures, are the high point of a visit by Russian Prime Minister Viktor Chernomyrdin, who arrived Thursday.

They were reported by state television, which did not give details. Chinese and Russian officials wouldn't discuss the oil and natural gas deal with Western reporters.

But Russia's Interfax news agency said the gas deal was worth $4 billion to $5 billion and calls for Russia to supply 26 billion to 39 billion cubic yards of gas annually to China. It said a pipeline would be built to carry natural gas to China from the Irkutsk region in western Siberia.

The report did not mention oil. But foreign news reports have valued the sale of Russian oil and natural gas to China at as much as $10 billion.

The energy deal is part of a Chinese effort to guarantee supplies to meet its rapidly growing industrial demand. China recently has signed oil deals with Iraq, Venezuela and the Central Asian republic of Kazakstan.

In another agreement Friday, China agreed to allow Russian trains onto its territory to simplify and speed up shipping between the two countries.

Chinese Foreign Ministry spokesman Cui Tiankai said Thursday the agreements were intended to increase annual trade between the countries to $20 billion by 2000, up from about $7 billion last year.

China and Russia also settled on terms for allowing the Russian consulate in Hong Kong to remain open after the British colony reverts to Chinese rule after midnight Monday.

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Johnson's Russia List

27 June 1997

djohnson@cdi.org