OREANDA-NEWS. November 10, 2010. In Seoul the negotiations were held between Alexey Miller, Chairman of the Gazprom Management Committee and Choo Kangsoo, President – CEO of Kogas as part of the visit by the Russian Federation President Dmitry Medvedev to the Republic of Korea. The heads of both companies summarized the joint study of options for natural gas supply from Russia to the Republic of Korea.

Alexey Miller and Choo Kangsoo had agreed through mail correspondence to start in December 2010 commercial negotiations relevant to natural gas purchase and sale contract. The parties came to an agreement on a number of prioritized issues, namely, on the commercial negotiations schedule and the contract validity period starting from 2017.

Summing up the meeting, Alexey Miller noted that the Eastern Gas Program encompassing construction of the Sakhalin – Khabarovsk – Vladivostok gas pipeline and the projected placement of the Yakutia – Khabarovsk – Vladivostok gas pipeline would not only meet the Russian consumer demand in the Far East, but also create the necessary prerequisites for extra gas supplies from Russia to Asia-Pacific including the Republic of Korea.

Alexey Miller also met with Kang Young-Won, President and CEO of Korea National Oil Corporation. The meeting addressed the Gazprom-KNOC cooperation prospects within the Eastern Gas Program including the projects for creating the gas chemical capacities in Russia’s Far East with the subsequent use of final products within and beyond the country, namely, in Asia-Pacific.
Background

On May 12, 2003 Gazprom and Korea’s Kogas entered into the five-year Agreement of Cooperation which was extended for another five-year term in 2008. The Agreement embraces a wide spectrum of issues including the study of possible ways to deliver Russian natural gas to Korea.

To implement the Agreement the parties set up the permanent Joint Working Group.

On October 17, 2006 the Government of the Russian Federation and the Government of the Republic of Korea signed the Agreement of Cooperation in the Gas Industry identifying Gazprom and Kogas as the companies authorized for overseeing natural gas deliveries from Russia to the Republic of Korea.

On September 29, 2008 Gazprom and Kogas signed the Memorandum of Understanding on natural gas supplies from Russia to Korea.

On June 23, 2009 Gazprom and Kogas signed the Agreement to jointly study the natural gas supply project. The Agreement stipulates studying options for natural gas supply from the terminal point of the Sakhalin – Khabarovsk – Vladivostok gas transmission system to Korea.

The state-run Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program) was approved by the September 2007 Order of the Russian Federation Industry and Energy Ministry. Gazprom was appointed by the Russian Government as the Program execution coordinator.

As part of the Sakhalin II project the Republic of Korea was supplied with some 2.9 million tons of Russian LNG between 2009 and 2010.

The Korea National Oil Corporation (KNOC) was set up in 1979. The company deals with oil exploration and production in Yemen, Argentina, Peru, Venezuela, Libya and Vietnam.