Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Beijing, Seoul Mull Siberian Gas Link

SEOUL, South Korea -- South Korea, China and Russia are to meet in Beijing on Tuesday to discuss a proposed $11 billion project to pipe natural gas from Siberia's giant Kovykta gas field to the energy-hungry Asian importers.

Analysts were cautious in immediately assessing whether the price tag made the project feasible, but the Siberian gas would meet a large portion of China's and South Korea's gas needs.

In addition, analysts said China would have a strong negotiating position since its giant market would be key for the project's success.

South Korea's Finance Ministry said in a statement on Monday that a study had concluded it would cost $11 billion to pipe natural gas via a 4,000-kilometer pipeline to China and South Korea from the Kovykta field.

"If realized, piped natural gas from Siberia would cost South Korea less than buying liquefied natural gas for sure," said Lee Eun-myung, an analyst at state-funded Korea Energy Economics Institute.

An earlier study had estimated gas from Siberia would be 20 percent to 30 percent cheaper than imports of the super-cooled LNG, which is transported by ship, Lee said.

South Korea, the world's second-largest LNG buyer after Japan, almost entirely relies on imports for oil and gas, while China is trying to diversify its energy sources.

If the plan went ahead, the Kovykta field, which is estimated to hold reserves of 840 million tons of gas, could supply 7 million tons of gas to South Korea per year for 30 years, the statement said.

Such a supply would account for 41 percent of South Korea's current annual imports, it said. Seoul officials have said the field could come online by 2008.

The field would also supply 14 million tons of gas to China per year.

The biggest stumbling block for the project remained the price of the gas, said Ellen Starostina, head of PetroFinance Consultancy in Moscow.