Tuesday June 23, 09:03 AM
SKorea, Russia discuss gas deal despite tensions
SEOUL (AFP) - South Korean and Russian officials have held talks on a huge natural gas deal, which could involve plans to build a pipeline across North Korea amid heightened regional tensions.
Korea Gas Corp (036460.KS - news) (KOGAS) officials said Alexey Miller, chairman of the management committee of Russia's state-run Gazprom, arrived Monday for talks on shipping details.
"The agenda includes a joint feasibility study on pipelining natural gas from Russia's Far East to South Korea through North Korea or transporting gas in a liquefied form by ship," a senior KOGAS official told AFP.
Gazprom has agreed to export 10 billion cubic metres (350 billion cubic feet) of gas a year to South Korea beginning the 2015-2017 period, the official said on condition of anonymity.
The initial deal was signed in Moscow last August on the sidelines of a Russia-South Korean summit. An official quoted at the time said gas imports would be worth about 90 billion dollars over three decades.
The deal requires joint feasibility studies on transport either by a pan-Korea pipeline or by ship.
Cross-border relations have markedly worsened over the past year and North Korea is also at odds with much of the world over its nuclear and missile ambitions.
Yonhap news agency said Seoul may consider a third option, an undersea pipeline linking Vladivostok to South Korea's eastern coastal city of Samcheok.
It said the Knowledge Economy Ministry was exploring the idea for fear that Pyongyang's nuclear and missile tests and ensuing UN sanctions may cause problems for other options.
A ministry spokeswoman said nothing had been decided and refused to say if an undersea pipeline was being considered.
The KOGAS official said he was unaware of proposals for an undersea pipeline, which "is not an easy option to take in terms of engineering and cost."
South Korea, one of the world's largest consumers of natural gas, imports 7.8 million tonnes every year for home heating alone. It is trying to diversify its sources from Southeast Asia and the Middle East.
It has a separate 20-year deal to import 1.5 million tonnes of liquefied natural gas from Russia's Sakhalin Energy every year.
Russia holds the world's largest natural gas reserves, estimated at 1,680 trillion cubic feet.
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