Russian quarrel may delay supply of natural gas here

Korea may not be able to import Siberian gas from 2008 as originally planned. A Korean firm planned to develop the Kovykta gas field in Irkutsk, Siberia, together with Russia and China. Oh Kang-hyun, the president of Korea Gas Corp., said yesterday, “The Russian gas company Gazprom and a private company, Rusia Petroleum, are engaged in a dispute over the development project.” The dispute is likely to delay the price negotiations among the three companies for project expenses and the supply price of the gas, Mr. Oh added. The joint development project at the Kovykta gas field, which has estimated reserves of more than 1 billion tons, was initially led by Rusia Petroleum, a joint venture of the U.K.-based BP Plc. and a Russian company. Rusia Petroleum announced late November the results of a feasibility study on jointly developing a natural gas field in Irkutsk with China National Petroleum Corp. and Korea Gas Corp. and exporting the gas to China and Korea for 30 years. The three corporations planned to start the price negotiations as soon as their governments approved the project. They had already drawn up an outline of the route for the pipeline. But the dispute started when Gazprom, the monopoly gas pipeline operator in Russia, criticized the project and suggested delaying the gas supply to China and Korea until 2012. Rusia Petroleum and Gazprom are reportedly discussing running the project together, indicating that the project itself has not been canceled yet. But if both agree to delay supplying gas to China and Korea, the Korean government’s plan to buy the Siberian gas to meet 25 percent of domestic demand in 2008 would have failed. Mr. Oh said, “If the price negotiations are delayed, the supply would not be provided until 2010, even if the two parties agreed to export the gas to Korea.” An official at the Ministry of Commerce, Industry and Energy said, “Even if the Siberian gas is not supplied in 2008, there would be no problem in the balance of supply and demand in Korea.” by Chang Se-jeong