Japan, China reach gas agreement

TOKYO, June 16 (UPI) -- Japan and China appear close to an agreement on joint natural gas exploration in the disputed East China Sea.

The agreement spells out where and how the exploration will take place and calls for China to allow Japan to invest in and earn proportional profits from their projects, Kyodo news service reported, quoting sources.

The agreement will cover the Chunxiao gas field, which China already operates a few miles west of the Japan-claimed median line, the report said.

Other areas in the agreement are the Chinese-named Duanqiao and Longjing fields, the sources told Kyodo. A formal announcement on the deal is expected soon.

Currently China does not recognize the Japan-claimed median line. Instead, China says its exclusive economic zone stretches to the edge of the continental shelf near Japan's Okinawa prefecture.

In exchange for bringing Chunxiao into the targeted zone, Japan will agree to bring its exclusive economic zone areas east of the median line for joint development in the future, the sources told Kyodo.

In June 2004 Japan protested China's unilateral move to start gas exploration in the disputed area.

The latest agreement, while leaving that territorial dispute unresolved, is expected to promote mutually beneficial ties between the two nations as agreed to last month by Japanese Prime Minister Yasuo Fukuda and Chinese President Hu Jintao.