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. Last Updated: 07/27/2016

Yukos to Seal $1.7Bln China Pipe Deal

HONG KONG -- Chinese oil major PetroChina could conclude a $1.7 billion pipeline deal with Yukos when President Vladimir Putin visits China in early December, HSBC Securities said.

"We speculate that a deal could be announced as early as this weekend during President Putin's last visit to China before President Jiang Zemin's term ends in March 2003," HSBC analyst Gordon Kwan said in a research report.

PetroChina and Yukos are in talks to build the 2,400-kilometer Angarsk-Daqing pipeline to channel crude oil from Siberia to China's Daqing from 2005.

"We also expect PetroChina to take an upstream stake in the Tomskneft and Yurubchenskoye fields, where BP could emerge as a strategic partner to complement the super oil major's interest in the Baku-Tblisi-Ceyhan pipeline," the report said.

Kwan said he expects the pipeline to deliver a rate of return of 15 percent and boost PetroChina's oil sales volume and earnings before interests, taxes, depreciation and amortization by 8 percent and 6 percent in 2005, respectively.

Yukos, Russia's second-largest producer, supplies the bulk of China's crude imports from Russia, which surged 65 percent year on year to 2.27 million metric tons in the first 10 months of 2002, Chinese customs data showed.