SHANGHAI, Nov 20 (Reuters) - Russia and China are close to a deal to build a $1.7-billion crude oil pipeline from eastern Siberia to northeast China, sources close to the Russian company involved in negotiations said on Wednesday.
Russia's second-largest oil producer, YUKOS, and the state-owned China National Petroleum Corp have completed a feasibility study on the project and could sign a deal as early as next month, a Beijing-based source told Reuters.
The pipeline would be crucial to China which aims to reduce reliance on imports from potential hot spots in the Middle East.
The 2,400 km (1,500 mile) pipeline, which could be under construction next year, would transport about 20 million tonnes of crude a year when finished in 2005.
Russia, the world's second largest oil exporter, is striving to locate markets for its remote eastern Siberian fields as the country's crude output continues to boom.
"Technical details aren't a problem, it's a matter of winning administrative approval now," the source said.
"We've finished the feasibility report. Both governments are scrutinising it and it's awaiting approval," he said.
YUKOS's chief representative in China, Sergei Prisyazhniuk, confirmed the two sides -- which had been thrashing out thorny details like prices and contractors -- were close to an agreement, but declined to elaborate.
CNPC officials could not be reached for comment, but YUKOS sources said CNPC, China's flagship energy producer, had sent a delegation to Moscow to discuss a variety of energy deals.
Analysts say Russian supply will be key in coming years as China, worried that 60 percent of its imports originate from the Middle East, hunts for alternative energy sources.
The pipeline, running from Angarsk near Irkutsk in Siberia to China's industrial northeast, could supply 30 million tonnes of oil a year from 2010 to 2030.
China, the world's fastest expanding major economy, imports about a third of its oil needs and by some estimates that could leap to nearly half, or about 75 million tonnes, by 2005.
Russian oil major YUKOS said in September it expects its oil output to show double-digit expansion in 2003, from about 1.4 million barrels per day at present.