North Korea Supports Pipeline

Aug. 15 2011 — 00:00

North Korea is in favor of building a natural gas pipeline linking Russia and South Korea that could benefit both Asian nations, South Korean Foreign Minister Kim Sung-hwan said Friday.

Russian Foreign Minister Sergei Lavrov told Kim that the pipeline has good prospects at a meeting earlier this month after Russian and North Korean officials discussed the proposal, Kim told reporters in Seoul today. The North Koreans are "positive" about the plan, Lavrov said, according to Kim.

"North Korea may earn cash from the pipeline while South Korea can import natural gas with lower costs," Kim said. "This would be the win-win project."

Korea Gas, the world's biggest importer of liquefied natural gas, and Gazprom have been trying to identify a supply route since at least 2003, when they signed a cooperation accord. Other options include a costlier and technically more challenging undersea pipeline and liquefied or compressed natural gas supplies.

Attempts to seek consent from North Korea to build a pipeline on its territory come as the two countries remain technically at war after their 1950-53 conflict ended in a cease-fire. North Korea's nuclear program and attacks on its southern neighbor have kept relations tense.

State-run Korea Gas has said gas demand for the power sector will grow 7.2 percent a year to 2015. South Korea, which imports almost all its energy needs, imported 32.6 million metric tons of LNG last year, up from 25.8 million tons in 2009. Kogas, as the company is also known, buys about 1.5 million tons of LNG from Russia's Sakhalin-2 project.

Gazprom, seeking to diversify away from Europe to gain revenue from fast-growing Asian markets, plans to sign a so-called "road map" to supply South Korea by pipeline in the near future, it said Aug. 5. Supplies could start in 2017, Gazprom has said.

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