Citing Igor Rogachev, Russia’s ambassador to Beijing, the Xinhua news agency has declared, “Russia has not ruled out building a US$2.5 billion oil pipeline from Siberia to northeast China.”

Russia, which has been making noises about adopting a rival Japanese proposal, seems to be more inclined to ship crude by rail and has announced ambitious plans to invest in the rail infrastructure needed for such a move.

However, according to energy expert Kang Wu of the University of Hawaii Energy Centre, “China remains keen to build a pipeline to Russia’s border, and will continue with plans to do so even if a rail link between the two countries is built, effectively eliminating the need for a pipeline.”

“In light of China’s constantly increasing demand for energy, [the country] is becoming more eager to gain access to oil [and] a railroad link between China and Russia would be a tenuous supply link, whereas a pipeline would represent a firmer commitment to China,” added Kang.

The final decision, however, rests with the Russian government and, according to the Xinhua reports, Moscow will make its decision during the second half of 2004 when officials of both countries meet for energy cooperation talks.