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Electricity Trade Flourishes

March 23, 2006 Jiang Wei (China Daily)

China and Russia are poised to expand electricity trade, a major step toward co-operation in the energy sector.

"We expect to realize a large-scale cross-border electricity supply during the next 10 years," said Zheng Baosen, executive vice-president of State Grid Corporation of China.

This year, Zheng's company and the largest electricity producer in Russia are scheduled to launch a feasibility study of plans for Russia to supply electricity to China.

>According to the plan, the Chinese company will increase its current electricity import from Russia by fourfold, up to 18 billion kilowatt hours by 2010.

By 2015, Russia's electricity supply will not only reach Heihe of Northeast China's Heilongjiang Province, but also the electricity grid across Northeast and North China.

After a long-term co-operation agreement was signed between the two companies last July, they have already fixed the method of supply, volume and pricing principles for the supply through Heihe.

>Some Russian entrepreneurs have suggested the two countries should turn more attention to co-operation concerning production of electricity appliances.

Experts said China and Russia compliment each other in terms of the electricity market. China has grown into a huge electricity consumer with potential of further growth, while Russia, abundant with waterpower, is able to produce electricity beyond its domestic demand.

The joint electricity project is not the only move the two countries have made to expand their co-operation on energy and resources.

Russia and China agreed to build two major gas pipelines to ensure Russian gas supply to China.

The agreement, expected to cost around US$10 billion, was signed by China's largest energy firm the National Petroleum Corp (CNPC) and Russian natural gas giant Gazprom.

More Chinese companies are seeking business opportunities in the neighbouring country.

China's top coal miner Shenhua Group was also interested in coal exploration in Russia, said Shenhua Vice-President Zhang Yuzhou. But he declined to elaborate on details.

>(China Daily 03/23/2006 page9)