He began the visit Tuesday by discussing energy, economic and security issues with President Hu Jintao.

"The energy department and companies of both countries will continue to actively pursue work on the advancement of pipeline projects to deliver oil and gas from Russia to China," Putin and Hu said in a joint statement.

China National Petroleum Corp will finance a feasibility study of an oil pipeline, Russian Energy Minister Victor Khristenko said Tuesday. Gazprom, Russia's state gas monopoly, may export to China through two pipelines, chief executive Alexei Miller said.

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China needs secure oil and gas supplies to meet energy demand. Hu wants a US$11.5 billion (HK$89.7 billion) oil pipeline from eastern Siberia to the Pacific port of Nakhoda to include a spur going into China. Russia is scheduled to start building the pipeline, which may also supply Japan, this year.

"We have determined the timeframe and volume of deliveries into the Chinese market," Miller said in Beijing. "They're on a very large scale and we are talking about not only gas deliveries but joint activities in exploration and production."

Gas prices will be linked to oil product prices and delivery from east and west Siberia may start within five years.

Some supply may come from fields operated by BP-TNK, the Russian venture of London-based BP.

The pipeline from west Siberia will be in operation first because its fields are more developed, Miller said.

China National, parent of Asia's largest oil company, PetroChina, signed agreements to work with Russia's pipeline company Transneft, Rosneft, and Gazprom.

"Russia has agreed to increase cooperation on the construction of the pipeline,"said Foreign Ministry spokesman Qin Gang.

Russia, which ships about 3 percent of its crude exports to the Asia-Pacific, is building pipelines to increase sales to Asian countries.

Putin assured Japan's senior vice trade minister Akira Nishino the oil pipeline would eventually be built to the Pacific coast, Hideji Sugiyama, vice trade minister, said Monday.

Russia supplies about 9.2 percent of China's oil needs. China gets more than 40 percent of its energy supplies from the Middle East and wants to diversify.

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