Russian gas program in the East
In the middle of 90-x, the project of laying a gas pipeline from Russia to South Korea came to the discussion. So this idea is not new, the Government of the Republic of Korea even allocated land acquisition for the construction of the pipeline. Later, in May 2003, Gazprom signed a five-year Cooperation Agreement with the Korean company Kogas. 2008 extended it for another five years and created a permanent joint working group.
The state program to create a unified system of production, transportation and gas supply of Eastern Siberia and the Far East was approved in September by 2007. The possibility of exporting gas to China and the APR countries was also stipulated. Gazprom was appointed coordinator of the Eastern Gas Program.
In June, 2009, the delegation of OAO Gazprom visited the Republic of Korea, and during the visit another agreement was signed on exploring the possibility of gas supplies through the Sakhalin-Khabarovsk-Vladivostok-Korea gas transmission system.
And, finally, the most important impulse to the gas project realization was the negotiations of the head of the Russian Federation with Kim Jong Il and South Korean President Lee Myung-bak in 2011. Korean leaders announced their participation in this large-scale project.
A meeting was held in Moscow by A. Miller (Chairman of the Board of Gazprom), the Minister of Oil Industry of the DPRK and the President of the Kogas company, at which a schedule of natural gas supplies from Russia to South Korea was signed. It is possible that deliveries will begin as early as 2017, and their volume will be of the order of 10-12 billion cubic meters per year.
However, there is still no agreement on joint work in the gas sector between the Russian Federation and the DPRK. Russia considers it necessary to conclude an intergovernmental agreement that will create a reliable legal basis for the implementation of the gas project. Gazprom intends to take over the resolution of financial issues relating to the construction of a gas pipeline on the territory of the DPRK (with Pyongyang) about 700 km long for gas supplies to South Korea. But inevitably problems will arise. associated with the passage of the pipeline through the DMZ (demilitarized zone), and their solution will require tripartite negotiations.
It is important to note that the implementation of this project concerns not only economic, but also geopolitical, strategic aspects related to security issues on the Korean Peninsula. The development of work on the project will contribute to the establishment of trusting relations between North and South Korea, will help resolve the nuclear problem and strengthen the position of peace and stability in Northeast Asia (Northeast Asia). These perspectives correspond to the national interests of the Russian Federation.
However, in the United States, Japan, and the Republic of Kazakhstan there are certain forces that are negatively related to the expansion of Russian economic activity in the region. Also, these political structures seek to achieve political and economic isolation of Pyongyang, in the hope that this will lead to a change in the current regime. Consequently, the joint Russian-Korean gas project is not in the interests of some countries.
At the same time, it is worth noting that Pyongyang is deeply interested in the gas project. First of all, from a purely economic point of view: on average, 150 million dollars a year for the treasury is at least not bad. But the idea to launch a gas pipeline along the bottom of the deep-sea of Japan, bypassing the territory of North Korea, was rejected as not payable.
Eastern gas project is beneficial to all its participants.
For example, for the Russian Federation - this is one of the ways to integrate into the East Asian economy, which is the main goal of Russia in this region. In the future, gas negotiations with China and Japan are planned.
On the South Korean side, dependence on traditional Middle Eastern gas sources is not very attractive from an economic point of view. In addition, the rapid growth of hydrocarbon energy consumption of the Korean Peninsula’s neighbor is predicted: Japan (especially after the Fukushima tragedy) and the PRC, in which gas consumption will exceed this figure in Europe.
In this regard, there are good prospects for the sale of Russian gas on the Chinese and Japanese markets. Today, Gazprom is engaged in the organization of gas supplies through two pipelines. The volume of supplies is about 70-billion cubic meters and by the 2030 year, the volume of Russian gas exports will reach 13% (whereas in Europe the share of our gas is about 30%). This will lead to an inevitable increase in pressure on the Russian gas market.
Undoubtedly, the dynamic and sustainable development of Kazakhstan will lead to an increase in gas consumption. Today, Kazakhstan is the second largest gas importer in the world after Japan. And besides, the economy of this country is 70% dependent on foreign energy-exporters.
As of today, the policy of the “gas pipeline to the East” is strikingly different from the policy of the past years in that Russia has recently moved from words to deeds. First of all, we are talking about laying the Sakhalin-Khabarovsk-Vladivostok gas pipeline. It is planned that the length of this pipeline will be about 1800 km, capacity - 30 billion cubic meters (the construction of the first stage has been completed). It is also planned to build an Eastern Siberia-Pacific Ocean pipeline, 4188 km in length and 80 oil capacity, million tons of oil per year (in 2014, according to the plan, completion of the second stage construction). The cost of building ESPO amounted to about 14 billion dollars (2 of them were allocated for the construction of the port in Kozmino).
One of the leading roles in the implementation of such large and expensive projects is assigned to the Prime Minister of the Russian Federation V. Putin. It was he who made efforts to redistribute the financial flows and technical resources of Russia in the Eastern direction. Under his influence, the management of Gazprom decided to withdraw significant financial resources from the project to develop the Bovanenkovskoye gas field (on the Yamal Peninsula), the purpose of which was to supply the Western consumer and invest them in the Eastern Gas Supply Project. Today, the construction of pipeline systems does not come with a typical delay for Russia, but even ahead of schedule.
We have achieved considerable success in the deployment of a large tripartite gas project. The most important stage has been passed - a political decision has been made. In the near future, equally important negotiations on the economic part will start, which should lead to the conclusion of a commercial contract in the middle of 2012. The future of the Russia-DPRK-RK project inspires justifiable optimism.
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