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. Last Updated: 07/27/2016

Gazprom Chief Slips Into N. Korea

VedomostiGazprom CEO Alexei Miller
Gazprom CEO Alexei Miller slipped into reclusive North Korea on a trip that analysts said was as much driven by Moscow's geopolitical diplomacy as by Pyongyang's desperate need for energy.

It was an unusually low-key visit for Miller, the man at the helm of the world's largest natural gas producer, whose tentacles extend from China to the United States.

The visit comes at a time of intensifying Russian energy politics in gas-starved Asia and talk of a Russian pipeline through communist North Korea.

A Gazprom statement on Friday said Miller had met Premier Pak Pong Ju in North Korea, as well as industry and oil ministers, to discuss cooperation in the oil and gas sectors. Exploration work coordinated by North Korea's Oil Ministry in 1997 had located seven promising offshore and onshore oil and gas fields, the statement said.

Gazprom had been mulling various routes for pipeline options to supply South Korea and Japan with oil and gas, including a route through North Korea.

The trip also coincides with diplomacy to revive stalled six-way talks on Pyongyang's nuclear program to which Russia is party, along with the two Koreas, China, Japan and the United States.

Interfax quoted a North Korean diplomatic source on Friday as saying Pyongyang could return to talks in February.

The talks have been on hold since June, with Pyongyang vowing to stay out until U.S. President George W. Bush changes his policy toward the North, which his administration has said is part of "an axis of evil," along with Iran and prewar Iraq.

Russia, which backed the communist North in the 1950-53 Korean War, has good access to North Korean leader Kim Jong Il.

North Korea expert Vasily Mikheyev, who chairs the Asia security program at the Carnegie Endowment for International Peace, said Russia was playing the gas card with North Korea to strengthen its position in the six-party talks.

"Russia wants to show to the world that it can contribute to a political settlement by offering energy to North Korea. But economically this doesn't make sense. No foreign investor would put money in North Korea to fund a pipeline there," he said.

Analyst Ron Smith at Renaissance Capital in Moscow disagreed, saying the pipeline did make economic sense for Gazprom.

He said Gazprom had told analysts its long-term strategy involved getting North and South Koreans together as potential customers for east Siberian gas.

For Gazprom, Smith said the most economic way of building a pipeline to South Korea from Siberia is to run it via North Korea since an offshore route would be too costly.

"The real target for Gazprom looks like South Korea at this point. As for the North Koreans, they would get free Russian gas in transit fees in any such deal," Smith said.

Russia's rail monopoly, RZD, is currently involved in an ambitious project to help the two Koreas rejoin the Trans-Korean railroad and link it to the Trans-Siberian.

The link would create a new and potentially lucrative cargo bridge from South Korea's deep-water port of Busan to Western Europe.

(Reuters, MT, AP)