On meeting of Gazprom and KOGAS' Joint Working Group
On 19 December 2005 Seoul (Republic of Korea) hosted the 3rd meeting of the Gazprom and KOGAS’ Joint Working Group, which was held within the implementation of an Agreement on Cooperation between the two companies.
The meeting was co-chaired by Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee and Lee Kyu-Sun, Senior Executive Vice President of KOGAS.
The parties addressed the prospects for the Russian-Korean cooperation in the gas sector, including matters in regard to the preparation and subsequent implementation of projects on natural gas supply from Russia to the Republic of Korea, and achieved an accord on paramount measures to be stepped up for the supply initiation.
The parties also looked into potential ways of promoting cooperation in dimethylether production and usage, pipeline operation reliability, gas storage, personnel training as well as in other sectors of mutual interest.
Both parties expressed their hope that the governments of the countries would shortly sign a pertinent Intergovernmental Agreement to speed up the initiation of sweeping commercial talks and seal a Contract on natural gas supply from Russia to the Republic of Korea.
At the end of the meeting the parties signed a respective Protocol.
“The existing Draft program on setting up an integrated gas production, transmission and supply network in Eastern Siberia and the Far East, with Gazprom named by the Russian Government as its coordinator, stipulates paramount development of the Sakhalin offshore fields, which establishes a favorable environment for both the pipeline and liquefied gas deliveries to the Republic of Korea. Gas will be piped to Asia Pacific from a united gas supply system being built in eastern Russia, through an integrated export channel, with pertinent intergovernmental agreements and long-term contracts on the Take-or-Pay terms accepted worldwide,” maintained Alexander Ananenkov.
At the meeting between Alexander Ananenkov and Soo-Ho Lee, CEO of KOGAS, the parties addressed the possibility of initiating preliminary talks over natural gas shipments to the Republic of Korea.
Due to limited natural gas reserves, the Republic of Korea is currently substantially dependent on LNG imports. The South Korean gas market is currently featured by a manifold gas transmission network linking onshore LNG terminals with major consumption provinces and, thus, largely contributing to the wider usage of natural gas both in the power generation and industrial & residential sectors.
The Republic of Korea is the world’s tenth energy consuming, sixth oil consuming, fourth oil importing and second LNG importing country.
On 12 May 2003, Gazprom and the Korea Gas Corporation (KOGAS) entered into a 5-year Cooperation Agreement embracing a wide spectrum of issues including potential deliveries of Russian natural gas to the Republic of Korea.
To implement the Agreement, the parties set up a standing Joint Working Group, with its first and second meetings held in February 2004 and August 2004, respectively.
Founded in 1983, KOGAS is 62% state run. KOGAS’ major business lines are the construction and operation of LNG-reception terminals and gas distribution stations, implementation of international gas projects and research for the gas industry. The company owns three LNG-reception terminals.
Information Directorate, OAO Gazprom