China cries foul over pipeline delay

According to Russian Prime Minister Mikhail Kasyanov the $US2.5 billion joint oil pipeline deal with China has now been delayed for the foreseeable future, however, he was quick to reaffirm Moscow's commitment to providing China with the resources to resolve the country's energy needs.

Kasyanov believes that the basic technical plan and the needs of the environment still must to be looked into and that it would take at least another three or four months before the Russian government would have a clearer picture of its plans.

China has accused Russia of reneging on the deal because of a more attractive Japanese bid that would give Russia access to a larger global market for its commodity.

Kasyanov tried to defuse the situation, pointing out that the Russian government does not have a say in the project as most Russian oil companies are private concerns. However, work on the pipeline still needs approval from the Russian environmental authorities before it can be given the green light.

Perhaps in an attempt to avert a diplomatic row between the two countries, Kasyanov has said that the Russian government would look into a variety of methods to increase oil exports to China and that rail transport could be a viable option. Kasyanov envisages that Russia would be able to increase oil supply to China by between 4.5 million to 5.5 million tonnes via rail.

Work on technical and environmental studies on the 2,400km pipeline from the Angarsk oil fields in Siberia to refineries in Daqing city still continue.

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