Agreement on cooperation between Gazprom and the Kogas corporation (South Korea)
Today, a meeting between Alexey Miller, Chairman of the Management Committee of Gazprom, and Kim Myung-Kyu, Chairman, President and CEO of the Korean gas corporation (Kogas), was held at Gazprom’s Headquarters.
The parties signed a 5 year cooperation agreement between Gazprom and Kogas.
Under the agreement, Gazprom and Kogas will examine the prospects of Russian gas deliveries to the Republic of Korea. The parties will develop scenarios of joint projects’ implementation in the third countries.
The parties are resolute to develop cooperation in the following businesses:
Development and implementation of joint projects in the natural gas production, transportation and marketing;
Development and introduction of financial schemes and investment programs to facilitate implementation of joint gas projects.
The agreement will promote sci-tech cooperation between the companies and the exchange of information on the prospects and dynamics of gas market development in the Republic of Korea. To fulfill the agreement, the parties will set up Working Groups for each topic of business cooperation.
“The agreement signed today will lay a legal basis for intensive cooperation between the two companies in the pipeline gas deliveries to South Korea as well as for realization of joint projects in the third countries. I am confident that our cooperation will go on as dynamically and efficiently as the agreement itself was prepared. We’ve made a real step in penetrating new promising markets. The agreement concluded today means that the principle of delivering gas via a single export route will be effected for the Korean gas market; the same principle is broadly used abroad”, – commented Mr. Miller the results of the meeting.
Gas reserves of the Republic of Korea are extremely limited, and today the country actually doesn’t produce gas from its fields.
At the same time, gas consumption in Korea amounted to 21.9 bcm in 2002. According to the forecasts, gas consumption in the country is expected to grow 1.5-fold by 2010 and to double by 2020. At present, the gas market of Korea entirely depends on LNG import. A well-developed gas transmission network linking the coastline LNG terminals with the main gas consumption centers has been created in the country. That’s why not only power producers, but also manufacturing companies and the citizens are among major gas consumers.
Set up in 1983, the Kogas company is the sole operator of the Korean gas transmission network. The State holds 62% of the company’s assets. Construction and operation of LNG terminals and gas distribution grids, implementation of gas projects abroad and R&D in the gas sector are the core activities of the company. The company possesses 3 LNG terminals and gas pipelines with the total length of 2,442 km.
Information Directorate, OAO Gazprom