Pipeline supplies of Russian gas to South Korea are expected to start in 2017, Gazprom CEO Alexei Miller reiterated Wednesday following talks between Russia's President Dmitry Medvedev and his South Korean counterpart Lee Myung-Bak in St Petersburg.
"Gas cooperation issues have been discussed during the talks, we may expect supplies of Russian pipeline gas to South Korea to start in 2017," Miller was quoted as saying by Russian news agency Prime.
Lee visited Russia for the Russia-South Korea Dialog forum, followed by the talks between the two presidents.
Russian gas giant Gazprom and South Korea's Kogas agreed on supplies of up to 10 billion cubic meters/year of Russian gas in 2008. The agreement stipulated possible startup of supplies in 2015 for 30 years.
The talks, however, stalled over North Korea's controversial nuclear program, while Gazprom and Kogas saw a pipeline that runs across North Korea as the preferred delivery option.
In November 2010, Gazprom and Kogas agreed to launch commercial talks on the deal, with the start of deliveries rescheduled for 2017.
Talks were intensified earlier this year after North Korea's leader Kim Jong-Il visited Russia in August to meet with Medvedev. Following the talks, Medvedev said that Pyongyang was interested in the project. North Korea is expected to receive about $100 million/year in transit fees from the pipeline.
In September, Gazprom and Kogas signed a road map for the implementation of the gas delivery project, agreeing that a pipeline via North Korea is the most economically efficient route. The two companies also considered possible LNG supplies or construction of an underwater pipeline to bypass North Korea for future gas supplies.
However, analysts remain skeptical on the prospects of a pipeline across the peninsula due to the political risks involved in dealing with North Korea.
Currently, Kogas imports 1.5 million mt/year of LNG from Russia's Gazprom-led Sakhalin 2 project under a 20-year contract that began in 2009.
