June 21, 2013 12:10 pm

By Courtney Weaver and Neil Buckley in St Petersburg

Rosneft has signed a deal to supply China with $270bn worth of oil over the next 25 years, as Russia looks to boost ties with the world’s largest energy consumer.

In a separate agreement, the state-owned China National Petroleum Corporation has also agreed to take a 20 per cent stake in Novatek’s $20bn liquefied natural gas project on Russia’s remote Yamal peninsula

As part of the stake, CNPC will receive 3m metric tonnes of LNG per year under a long-term contract – a move that will end Gazprom’s longtime monopoly on gas exports.

The deals mark at least a partial pivot towards Asia as Russia seeks to exploit China’s ever-growing appetite for energy, amid stagnant demand from Europe and attempts by European countries to reduce reliance on Russia.

Supplies to China were already running ahead of what oilfields in Russia's east Siberia region could deliver, said Ildar Davletshin, oil and gas expert at Renaissance Capital, the Moscow investment bank.

Mr Davletshin said 20 per cent of the volumes supplied to China were coming from west Siberia, oil that would otherwise have travelled west.

Russia currently sends 15m tonnes of oil a year to China through the East Siberia Pacific Ocean pipeline that opened in 2009, a fraction of its 518m-tonne annual oil output. This year the total capacity of the ESPO – to China and the Pacific coast terminal at Kozmino – is scheduled to be upgraded from 30m tonnes a year to 50m tonnes.

Friday's agreement represents a doubling of volumes to China. Igor Sechin, Rosneft chairman, said the state-controlled group would supply 365m tonnes of oil to China over 25 years starting next month.

He added that the deal with China represented one of 30 agreements that Rosneft would sign at the St Petersburg International Economic Forum, the state-organised annual investor conference.

Ivan Menshikov, general manager of Taas Yuryakh Neftegazdobycha, an independent oil company developing fields in the region, said the agreements with China would provide an incentive to develop East Siberia, seen as the next frontier for Russia's oil industry. Taas Yuryakh could wind up participating in Friday's export deal if it concludes a deal to market, through Rosneft, the 6m tonnes per year it is aiming to produce.

East Siberia’s newer fields are planned to eventually supplant ageing fields in West Siberia which have been the backbone of Russia's oil industry for 40 years.

Rosneft, which has close to a 40 per cent share of Russia’s oil output, also sealed a $7bn agreement to supply 8m tonnes of oil to the Czech Republic together with PKN Orlen through to 2016, as well as a deal with Trafigura. The Russian group also signed a preliminary agreement to supply liquefied natural gas to Vitol, the largest oil trader.

Rosneft said it would supply Trafigura with 10m tonnes of crude oil and petroleum products over the next five years, with a $1.5bn pre-payment from Trafigura.

Vladimir Putin, the Russian president, said on Thursday during a meeting with Zhang Gaoli, China’s deputy premier, that Rosneft had prepared an “unprecedented contract” to deliver “hundreds of millions of tonnes of crude” to China.

Mr Putin put the value of the deal at $60bn. Vedomosti, the FT’s Russian sister paper, reported on Friday that the $60bn sum might refer to an advance payment to Rosneft secured against future oil deliveries.

Novatek’s agreement was expected to be signed later on Friday, according to Gennady Timchenko, the tycoon who owns a majority of Novatek together with Leonid Mikhelson, the chief executive.

“Today, we are going to sign an agreement for delivering [LNG] to China, and I think this will send a signal to the Europeans about how to operate in this sphere,” Mr Timchenko told a meeting at the St Petersburg forum.

Novatek has expanded rapidly in recent years to become Russia’s second-biggest gas producer after Gazprom, which to date has had a monopoly on gas exports.

Gazprom is also working on finalising a longstanding plan to send gas via pipelines to China, which it hopes to complete this year after several years of on-off talks. A memorandum of understanding was signed after Xi Jinping, the Chinese president, met Mr Putin in Moscow in March.

Additional reporting by Charles Clover