Gazprom Eyes Partners in Korea, Japan

Gazprom said Tuesday that it would 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.

Company executives said Gazprom was also exploring ways to supply gas to South Korea from Vladivostok as part of an agreement with state-run Korea Gas that will run until 2013.

Deputy chief executive Alexander Medvedev told a news conference that 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 division 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 tons of natural gas per year from Sakhalin-2.

Medvedev also said the company was looking for a site near Vladivostok for a second LNG plant. A timetable will be known once a location is found, he said.

Gazprom plans by 2020 to supply 21 billion cubic meters 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 at the news conference, Gazprom said it was considering partners for gas projects in the 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," the statement said. (Reuters, Bloomberg)