The world's heavyweight energy producers and consumers are increasing international cooperation to address growing demands for energy, with several cross-border projects involving China, India and Russia being possible.

 

Two oil conglomerates in the world's two most populous nations, China and India, have signed an initial agreement for future partnership in a slew of oil business operations which include exploitation, refinery and international trade.

 

The biggest gas producers in China and Russia are also reported to be signing a memorandum of understanding this month on key factors, such as price, to supply gas to China.

 

Meanwhile, in Washington, the chairman of the Senate foreign relations committee said the US must expand international coordination of energy issues, especially with China and India, to address concerns about growing global competition for energy resources, the Financial Times reported.

 

India's second biggest state-run oil company, Hindustan Petroleum Corp, yesterday said it had signed a memorandum of understanding with China's top oil refiner, Sinopec Corp, for energy projects in China, India and other countries.

 

The two oil giants from the countries initially agreed on Monday to develop joint projects in the areas of "international trade, exploration & production, refineries & petrochemicals, engineering and technical services, consultancy services, R&D (research and development) etc," the Indian oil firm said in a statement to the Mumbai stock exchange yesterday.

 

A source close to the deal, who asked not to be named, confirmed the information to China Daily yesterday, but declined to comment further.

 

"It is still a very preliminary agreement," the source said.

 

India's former oil minister, Mani Shankar Aiyar, initiated extensive partnerships between Indian and Chinese energy companies during a visit to Beijing in January. India, which relies on imports for about 70 per cent of its oil needs, expects to work with China to help secure oil and gas assets overseas at lower costs.

 

India's biggest gas distributor Gas Authority of India Limited (GAIL), expects to sign an agreement with Beijing Gas Group Company Ltd "within months" to set up a joint venture to meet surging gas demand in the capital city. That was according to S. Prabhakar Rao, director for projects from GAIL, speaking on the sidelines of an oil and gas transport summit last month.

 

Russia's Interfax reported on Monday that the world's biggest gas producer OAO Gazprom, based in Moscow, and China's top oil company China National Petroleum Corp (CNPC) would soon sign a memorandum on the main details of gas supplies for China. The signing is due to happen during a Sino-Russian summit taking place in Beijing from March 21-22, the agency said, citing Gazprom Deputy CEO Alexander Medvedev.

 

The Beijing representative office of Gazprom yesterday refused to comment, and the CNPC spokesman said he was not aware of a possible deal.

 

Gas demand in China is expected to reach 120 billion cubic meters (bcm) by 2010 and 200 bcm by 2020. However, it is estimated that domestic production will be only 80 bcm and 120 bcm respectively.

 

To fill the gap, the country's key energy players, including Sinopec and PetroChina, have massive plans to build LNG (liquefied natural gas) terminals to import gas along the coast. They also plan to build cross-nation pipelines to link the resource-rich west with the energy-hungry east and south.

 

But high gas prices have prolonged talks to secure overseas gas sources to feed the terminals and pipes, and may further delay the country's ambitious aim of using cleaner natural gas to meet surging energy demands, industry analysts have said.

 

OAO Gazprom last September said it was in talks with CNPC to export gas to China through a cross-border pipeline.

 

The line may run through northeastern China's Heilongjiang Province or the Xinjiang Uygur Autonomous Region in the west, Medvedev said last year. It is expected to have an annual capacity of as much as 30 billion cubic meters (bcm) a year.

 

(China Daily March 15, 2006)