Japan is ready to provide Russia with 8.4 billion yen to help it study the feasibility of a pipeline project sought by Tokyo, sources said Saturday.
The funds will be used to study the amount of crude oil reserves in untapped fields in eastern Siberia, they said.
The move is intended to encourage Russia to start building a Japan-proposed pipeline route ahead of a competing Chinese plan, the sources said.
Japan and China have lobbied for separate routes for a planned pipeline connecting Tayshet in eastern Siberia to Perevoznaya near Nakhodka in the Russian Far East.
Japan has urged Russia to build a pipeline from Angarsk near Lake Baikal to Nakhodka on the Sea of Japan, a route that would allow Russia to ship oil not only to Japan but to other Asian countries and the United States.
China wants the pipeline to run to Daqing, an inland city in Heilongjiang Province that is closer to Angarsk than Nakhodka, arguing this would save construction costs.
Russia's state-owned Transneft is in charge of building and managing the pipeline.