"Special attention was paid to the implementation of major projects to build gas and oil pipelines from Russia to China," foreign ministry spokesman Vladimir Rakhmanin, who described the talks as successful, told a briefing on Thursday.

A protocol on gas deliveries was signed between Russia and China last November, and a number of companies and countries are already looking with longing at the vast Chinese market.

The most advanced project is from the Kovykta field, near Lake Baikal and Irkutsk in eastern Siberia, where an appraisal study is under way to establish if the field contains sufficient resources to justify the huge costs involved.

Russia's Russia Petroleum is the licence holder and operator of Kovykta. Russia is 60 percent owned by a joint venture between Russian company Sidanko andBritish Petroleum.

Sidanko and BP own, respectively, 55 per cent and 45 per cent of the joint venture. Rusia's other big shareholders are Irkutsk oblast or regional administration, power utility Irkutskenergo, and South Korea's East Asia Gas.Howard Chase of BP in Moscow told Reuters that the appraisal should be completed by late 2000 or early 2001.

"The priority activity at the moment is the proving up of sufficient reserves to underpin the scheme," he said, adding that Sidanko, BP, China National Petroleum Corporation (CNPC) and others were actively discussing development of the project.

Central to the project is the construction of a pipeline to move gas to China, although details have not yet been worked out. "It's too early to say what a pipeline consortium might look like," Chase said.

"We would certainly expect major upstream investors like BP to take an interest, but it's impossible to say at this stage what this interest might be," he added.

He said the route of the pipeline had not beensettled, but" it's clear that there's a major market in the Beijing region."

There have been talks of sending spurs off the main pipeline to South Korea and Japan. The estimated cost of the line varies from below $6 billion to $12 billion, with much depending on the route and possible branch lines. The potential gas market in China is huge, given that the country already faces an overall energy deficit. It became a net oil importer in the early 1990's, and the gap between oil supply and demand is widening.

Jonathan Stern, senior vice president of Gas Strategies, said that gas would be the best fuel to fill China's growing energy deficit.

And he agreed that the Kovykta field was the most advanced of the possible supply sources. But he added a note of caution.

"The whole idea was the project would be anchored by a Korean sale. But that prospect has been severely delayed, by several years, by the Asian Financial crisis," he said. "So the Chinese market is likely to be central to the whole thing."

Buthe said doubts existed over how some potential Chinese consumers, such as power stations, would be able to pay for gas.

BP's Chase said there was also a potential local market for gas in Irkutsk. But he agreed it may be harder for natural gas to compete with liquefied natural gas in Korea and Japan.

"The key market is China," he said.

The Central Asian republic of Kazakhstan, with vas thydrocarbon reserves but limited access to markets, is also keen to tap into the Chinese market.