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Oil dominates Russia-China talks

Russian President Vladimir Putin is holding talks in Beijing on contentious plans for an oil pipeline.

Mr Putin met President Hu Jintao at the start of his visit, and the two are expected to sign co-operation agreements on issues including energy.

China and Japan have been pursuing rival plans to build pipelines to exploit oil from Siberia.

But Chinese leaders have been frustrated by Russia's reluctance to give their plan the go-ahead.

Chinese Prime Minister Wen Jiabao pledged to invest about $12bn (9.75bn euros) in the Russian energy sector during his Moscow talks in September.

Map showing Russia's pipeline options

Before setting off for the three-day state visit, President Putin said Russia would be driven by its own interests in deciding where to build the pipeline.

The BBC's Louisa Lim, in Beijing, says that to Chinese ears, this may sound like an impending rejection of the Chinese proposal.

Mr Putin said Russian interests would come first in deciding where to build a highly contested oil pipeline from Siberia.

Energy-hungry China and Japan have both been vying for Russia's oil.

The two Asian rivals have offered huge investments if their preferred pipeline route is picked by Moscow.

The Japanese government has also promised at least $5bn in investment in Russia's underdeveloped Far Eastern region.

'Frank' discussion

In an interview with Chinese reporters on the eve of his visit, President Putin said the charged geopolitical debate over the route of the oil pipeline had not been decided yet.

Chinese worker in oil refinery
China is importing as much oil as it possibly can

"First of all, we have to be driven by our national interests. We have to develop the eastern territories of the Russian Federation, the territories of the Far East," he said, according to a transcript released by the Kremlin.

Mr Putin said Russia welcomed China's plans to invest in the Russian economy, but urged Beijing to put its money into sectors other than energy.

"We would like these investments to be fairly balanced... and they must first of all be focused on high-end technologies," he said.

President Putin also promised to hold "an absolutely frank" discussion with President Hu on the issue.

A pipeline to China would run about 2,400 kilometres (1,440 miles) from the Siberian city of Angarsk to the Daqing oil refineries in north-eastern China.

The estimated cost of the project stands at about $3bn dollars (2.4bn euros), but official figures vary.

The route favoured by Japan would cover some 4,100 km form the city of Taichet to the Sea of Japan port of Nakhodka. It is estimated that this project would cost four times as much as the Chinese route.

Fight on terrorism

President Putin and top Chinese officials are expected to sign a range of deals on issues such as space flights, atomic energy and high technology, our correspondent says.

A joint communique will also be issued which is expected to feature the issue of terrorism.

Both countries have been accused of using the war against terror to perpetrate human rights abuses and both have responded by accusing other countries of using double-standards in the war against terrorism, our correspondent says.

RUSSIA'S FAR-EAST PIPELINE CHOICE
Map of Russia showing pipelines
  • Angarsk-Daqing pipeline: Length - 2,400km; Estimated cost - $1.9bn; Capacity - 0.6 million barrels per day by 2010
  • Angarsk-Nakhodka pipeline: Length - 3,800km; Estimated cost - $5.2bn; Capacity - 1m barrels per day by 2010

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