S.Korea-Russia Summit to Discuss Pipeline Project

      September 02, 2011 13:07

      The presidents of South Korea and Russia are expected to meet in November to give shape to a massive gas pipeline project from Siberia through North Korea. The project was agreed in principle by North Korean leader Kim Jong-il and Russian President Dmitry Medvedev on Aug. 24.

      Russia's state-run gas corporation Gazprom and the Korea Gas Corporation are reportedly in negotiations. In reply to an e-mail from the Chosun Ilbo on Wednesday, a Gazprom spokesman said, "Gazprom and the North Korean government are holding dialogue on cooperation in the energy sector. Gazprom is also discussing with the Korea Gas Corporation ways to transport gas to South Korea from gas terminals in Sakhalin, Khabarovsk and Vladivostok."

      Three international events in November offer a chance for the two presidents to meet on the sidelines -- the Asia-Pacific Economic Cooperation summit in Hawaii, the G-20 summit in Cannes, and the East Asia Summit in Bali.

      It would then be natural for them to discuss the gas pipeline project. A visit by President Lee Myung-bak to Russia could also give much more weight to bilateral discussions.

      A senior government official said. "I understand that during a meeting at Cheong Wa Dae last weekend, President Lee told GNP Chairman Hong Joon-pyo, 'I think there could be a good result for the Russian gas pipeline project in November.'"

      A GNP lawmaker on the National Assembly's Foreign Affairs, Trade and Unification Committee quoted Foreign Minister Kim Sung-hwan as saying a Gazprom official will visit Seoul soon to discuss the laying of gas pipelines with KOGAS.

      Kim in turn quoted his Russian counterpart Sergey Lavrov as promising at a bilateral foreign ministers meeting on Aug. 8 to put the deal through.

      Separate talks are underway between South Korea and Russia and between North Korea and Russia. The biggest problem is that there is no direct dialogue between the two Koreas.

      A government official on Thursday said, "Seoul-Pyongyang talks hold the key to the gas pipeline project."

      The North is asking US$150 million per year as a fee to let the pipeline be built, according to government officials here. The question of transit fees has always caused disputes between gas suppliers and the countries through which pipelines run.

      Russia caused a gas shortage in Ukraine and Europe by suspending gas supply in 2009 after conflict with Ukraine over the transit fee. At the time, Russia agreed to pay Ukraine $1.70 per 1,000 cubic meters for every 100 km. Based on this formula, the North can demand up to $170 million per year, given that South Korea can import 10 billion cubic meter of Russian gas annually under a protocol on gas industry cooperation between the two sides from 2008 and assuming the pipeline is about 1,000 km long.

      But a senior government official said, "Even if the North and Russia start negotiations right now, it'll take a few years for all parties to reach a final agreement,"

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