Russia is in the enviable position of being wooed simultaneously by Asia's two main powers, China and Japan. At the same time, it has to walk a fine line because it is unlikely to be able to please both.
Two years ago, China and Russia signed a strategic agreement concerning the construction of a 2,400km pipeline at a cost of US$1.7 billion to bring Russian oil from Angarsk, in eastern Siberia, to Daqing, in Heilongjiang province.
The Chinese, who were self-sufficient in oil until about a decade ago, now require increasing imports to fuel their modernisation drive and have become the world's second largest oil consumer, behind the United States.
However, Japan cast a cloud over China's plans by making a bid for a much longer and more expensive pipeline to be built from Angarsk to the Russian coastal city of Nakhodka, on the Pacific coast, from where the oil can be put aboard tankers to be shipped to Japan. The Japanese want to reduce their dependency on oil from the unstable Middle East. Last year, Transneft, the state-owned pipeline monopoly, put forward a plan for an Angarsk-Nakhodka pipeline and said it had been approved by President Vladimir Putin.
The Chinese were bewildered by this turn of events. In February, the People's Daily website carried an article that asked: 'Will [the] Russian oil pipeline lead to China or Japan?' The Russian government, it said, 'is still vacillating' over whether to build a pipeline to Daqing or Nakhodka.
In May, when President Hu Jintao paid a state visit to Russia, China National Petroleum Corporation and Russia's private oil producer Yukos signed an agreement, setting out key aspects such as the quality of oil to be supplied, contractual terms and pricing formulas.
Everything appeared set for Russia to provide China with oil for 25 years, from 2005 to 2030, at a cost of US$150 billion. China, like Japan, wants a secure source of oil rather than rely on the Middle East, with its constant political upheavals.