Weighing the options: Gazprom's Alexander Medvedev
Gazprom eyes Asian LNG partners
Russian gas monopoly Gazprom will consider inviting South Korean and Japanese partners to process gas in the country's far east as it prepares to become a major supplier of liquefied natural gas.
Gazprom executives said today that it was also exploring ways to supply gas to South Korea from the Russian city of Vladivostok, as part of an agreement with state-run Korea Gas that will run until 2013, wrote Reuters.
Deputy chief executive Alexander Medvedev told a news conference a pipeline would be the cheapest way for Gazprom to move gas to South Korea, but that the division of Korea made this difficult.
North Korea lies between Vladivostok and South Korea.
"The idea of sending gas by pipeline to South Korea clashes with the divison of the two Koreas," Medvedev said.
"The economical delivery of gas by pipeline needs to be resolved by the Koreans, and that's also a question of their relations with the United States," he said.
Korea Gas is seeking to import 1.5 million tonnes a year of natural gas from Sakhalin-2.
Gazprom plans by 2020 to supply 21 billion cubic metres of LNG from a new plant on the island of Sakhalin to countries in the Asia-Pacific region.
By 2030, it plans to raise supplies to 28 bcm per year.
In a statement distributed to reporters at the news conference, Gazprom said it was considering partners for gas projects in the Russian Far East.
"We are working out the possibility of the participation of Japanese and South Korean companies in projects to create gas processing and petrochemical production in the east of Russia," Gazprom said in the statement.
Gazprom plans to start shipping LNG from its Sakhalin-2 project by the beginning of 2009.
Meanwhile, from Sakhalin-1, Medvedev said it was unlikely gas would be sent to China, contrary to a preliminary agreement signed by its partner in the development, ExxonMobil.
"We don't see any prospects for sending gas from Sakhalin-1 to China," Medvedev told the news conference.
ExxonMobil said in February gas from Sakhalin-1 could be exported as the Russian market would not require all of the gas produced there.
The US company signed a preliminary agreement in 2006 to sell gas to China, but Gazprom last year asked the Russian government to block ExxonMobil from selling Sakhalin gas in Asia, saying production was required for the domestic Russian market.