Russia-South Korea pipeline talks progress
By Staff reporter | 8 November 2011 16:16 GMT
Talks between Russia and South Korea about building a gas pipeline between the two countries appear to be progressing, despite the difficulties in securing safe transit through North Korea.
Russian President Dmitry Medvedev and his South Korean counterpart President Lee Myung-bak agreed, on 2 November at the annual Korea-Russia Dialogue in St. Petersburg, to go ahead with the construction of the pipeline, which will link Russia and South Korea via North Korea. The day before, Gazprom and South Korea’s Kogas signed a memorandum of understanding with Gazprom Chief Executive Alexei Miller for pipeline deliveries to begin in 2017. There was also talk of Russia guaranteeing the safe transit of gas to the South Korean border.
The countries have discussed the trans-Korean pipeline since 2003. The talks intensified after Medvedev’s visit to South Korea in November 2010, and North Korean leader Kim Jong-Il’s trip to Russia in August 2011.
However, analysts see geopolitical manoeuvring behind the renewal of talks. The pipeline is a “bluff” aimed at helping Russia secure a pipeline supply agreement with the Chinese and to get the Japanese more involved in building LNG terminals on the Pacific Coast, RusEnergy partner Mikhail Krutikhin told Interfax.
He added that pipeline exports to China and increased LNG deliveries to Japan are two priorities for Gapzrom. However, both markets are difficult to enter. China and Russia still have not agreed on the price formulae, while the Japanese are waiting for confirmation regarding Russia’s ability to secure timely delivery of necessary gas volumes from the Sakhalin LNG project.
Russia is “desperate to penetrate Asia’s gas market and… South Korea became the targeted vehicle to facilitate Russia’s aim to maximise the export gas price”, Dr. Keun-Wook Paik, a senior research fellow at the Oxford Institute for Energy Studies told Interfax.
From the South Korean perspective, Russia’s pipeline proposal could be a focal point of a summit between Myung-bak and Jong-Il next year, explained Wook-Paik. The summit will help Myung-bak earn a dividend from scheduling a “high-profile yet ineffective political event before he steps down in 2013”, he concluded.
Russia-South Korea pipeline talks progress
Russian President Dmitry Medvedev and his South Korean counterpart President Lee Myung-bak agreed, on 2 November at the annual Korea-Russia Dialogue in St. Petersburg, to go ahead with the construction of the pipeline, which will link Russia and South Korea via North Korea. The day before, Gazprom and South Korea’s Kogas signed a memorandum of understanding with Gazprom Chief Executive Alexei Miller for pipeline deliveries to begin in 2017. There was also talk of Russia guaranteeing the safe transit of gas to the South Korean border.
The countries have discussed the trans-Korean pipeline since 2003. The talks intensified after Medvedev’s visit to South Korea in November 2010, and North Korean leader Kim Jong-Il’s trip to Russia in August 2011.
However, analysts see geopolitical manoeuvring behind the renewal of talks. The pipeline is a “bluff” aimed at helping Russia secure a pipeline supply agreement with the Chinese and to get the Japanese more involved in building LNG terminals on the Pacific Coast, RusEnergy partner Mikhail Krutikhin told Interfax.
He added that pipeline exports to China and increased LNG deliveries to Japan are two priorities for Gapzrom. However, both markets are difficult to enter. China and Russia still have not agreed on the price formulae, while the Japanese are waiting for confirmation regarding Russia’s ability to secure timely delivery of necessary gas volumes from the Sakhalin LNG project.
Russia is “desperate to penetrate Asia’s gas market and… South Korea became the targeted vehicle to facilitate Russia’s aim to maximise the export gas price”, Dr. Keun-Wook Paik, a senior research fellow at the Oxford Institute for Energy Studies told Interfax.
From the South Korean perspective, Russia’s pipeline proposal could be a focal point of a summit between Myung-bak and Jong-Il next year, explained Wook-Paik. The summit will help Myung-bak earn a dividend from scheduling a “high-profile yet ineffective political event before he steps down in 2013”, he concluded.