China to propose energy cooperation deal at APEC to satisfy oil thirst

Nov 06, 2004 01:00 AM

China, whose booming economy has given it a voracious appetite for oil, will propose an initiative to enhance energy cooperation to ward off price shocks with 20 other Asia-Pacific economies later this month.
China had mapped out a framework initiative to put forward at the Asia-Pacific Economic Cooperation forum in Chile, which will be attended by President Hu Jintao, a senior Chinese official said.

"Mainly we hope that APEC members can... develop new energy sources and... create an environment of mutual benefit in energy development and face together the challenges of energy market fluctuations and rising energy prices," Assistant Foreign Minister Shen Guofang told.
China's economy, which has been growing at rates of more than 9 % a year, is driving demand for coal and oil that far outstrips national supply, leading authorities to warn that shortages could trigger power cuts this winter. Heavy investment in raw materials, manufacturing and infrastructure has also drained coal stocks and sent oil imports soaring more than 30 % from last year.

With crude oil prices at record highs and hovering near $ 50 a barrel, Beijing is keen to extend cooperation that would help it ward off shocks to one of the world's fastest growing economies. It has already been seeking oil deals with APEC member Russia to run a pipeline from Western Siberia, and there are prospects for an $ 18 bn project to take gas to China.
China also has committed to buy gas from Indonesia, Asia's only OPEC member. Hu, who will travel to Brazil, Argentina and Cuba as well as Chile during the trip, will also propose an Asia-Pacific finance and development centre, Shen said.
"We hope to strengthen mutually beneficial cooperation with all members through this meeting."

The forum is unlikely to reach more than a broad agreement to cooperate on energy issues. Vice Foreign Minister Zhou Wenzhong said he did not expect any energy deals to be signed on the trip.
Asian governments have already taken steps to lessen their dependence on oil from the Middle East with the Qingdao Initiative, signed by the 22-member Asia Cooperation Dialogue. That group, which includes oil producing nations Kazakhstan, Bahrain, Oman and Qatar, has also agreed to take steps toward building a regional oil stockpile.

The Asia-Pacific region imports about two-thirds of the oil it consumes.

Source: China Post
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