The deal will see the supply of 365 million metric tonnes of oil to China starting from next month, state-run China Daily reported today.
China’s largest State-owned oil and gas producer, China National Petroleum Corporation (CNPC), and Russian oil giant Rosneft inked the agreement yesterday.
Igor Sechin, the chief executive of state-controlled Rosneft, said deliveries could start as early as this year.
The oil is likely to be delivered to China via the existing Eastern Siberia-Pacific Ocean oil pipeline that will pump direct into the Chinese region of Mohe in Heilongjiang province, the Daily report said.
Officials from CNPC told the Daily that the deal had been in discussion for months, since Chinese President Xi Jinping visited Moscow and an agreement was signed in March.
The source said the price of the deal had been a major sticking point between the two sides.
During his visit to Russia on Thursday, Vice-Premier Zhang Gaoli said that China was keen to work together with Russia to maximise the potential for bilateral economic cooperation.
Russia has been looking for new markets for its energy exports because of shrinking demand in Europe, its traditional market, said Liao Na, the vice-president of energy consultancy ICIS C1 Energy.