Russia will build six submarines for the Vietnamese navy, the daily Kommersant reported on Monday.
The St Petersburg naval dockyard Admiralteyskye verfi and Vietnam will shortly sign the contract, worth 1.8 billion dollars, the report said, quoting sources close to Russian arms export agency Rosoboronexport. It gave no time frame.
"Initially it was expected that the submarines would be bought by Venezuela, but Rosoboronexport refused to clinch the deal with that country, largely due to a recent meeting between Venezuelan President Hugo Chavez and his American counterpart Barack Obama," Kommersant said.
Chavez, a ferocious foe of the United States under the George W Bush presidency, showed signs of warming to Obama during the Americas conference earlier this month, telling the new US president: "I want to be your friend."