Chinese and Russian co-operation in the energy sector will expand beyond the traditional Oil and Gas arena as economic ties between the 2 countries continue to tighten, industry experts say.
Russia sold 2.31-M tons of Crude Oil to China in March, a Y-Yincrease of 47.8%. Russia became China's 3rd-biggest source of Crude Oil after the country cut Crude Oil purchases from Iran by more than 50% Y-Y.
Russia exported a total of 7.17-M tons of Crude Oil worth $2.06-B to China in 1st 3 months of this year, an 81.4% increase from the same period last year.
Growth of such imports from Russia will continue, as the two countries, which represent the World's major Crude Oil consumer, China, and supplier, Russia, need each other to maintain economic momentum, said Song Kui, a senior energy researcher at the Northeast Asia Research Institute at the Heilongjiang Provincial Academy of Social Sciences.
The Oil and Gas sectors make up more than 20% of Russia's GDP, while China, the World's 2nd-largest economy and Crude Oil consumer, depends heavily on imports of foreign Crude Oil, more than 55%, to support its economic growth.
Energy co-operation between the 2 countries has been improving at a stable pace measured by any means from trade volume to the number of participating sectors, said Han Wenke, director of the Energy Research Center at the National Development and Reform Commission.
Energy ties spearhead the 2 countries' strategic co-operation, which will have even brighter prospects as bi-lateral trade grows, Han said.
Vice-Premier Li Keqiang began his official visit to Russia, Thursday and will stay until Monday, making it the 1st official visit by a top Chinese leader to the country since Russia's March Presidential election.
The 2 countries set a target to increase bilateral trade to $100-B by the end of Y 2015 and to $200-B in Y 2020, compared with $79.3-B in trade last year.
The 1st Crude Oil pipeline connecting Russia's Siberia region to northeastern China's Daqing started operation on 1 January last year. The pipeline serves the 2 countries' determination to lower delivery costs and provide more efficient means to deliver Crude Oil.
Negotiations between China and Russia about 2 more Nat Gas pipelines have stalled due to price issues. The disputes are commercial, as companies involved in the energy projects have to take profitability into consideration, Song said.
But he added that the conflicts have eased after Russia achieved membership of the World Trade Organization (WTO) in December by providing the companies involved with a fairer and more transparent business environment.
In addition, apart from traditional Oil and Gas resources, China and Russia still have room to co-operate in sectors such as renewable energy and unconventional Nat Gas, which Russia has yet to tap in earnest, Han said.
We can expect broader and deeper cooperation between our 2 economies, Han said.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.