Korea ready to begin producing natural gas at deep-sea drill site

The Korea National Oil Corp. said yesterday that it is starting commercial production of liquefied natural gas today after a successful four-month trial. “There are about 5 million tons of liquefied natural gas and 1.7 million barrels of condensate. If we had imported this gas, it would have cost $1.2 billion,” an agency official said. The deep-sea drilling location is about 85 kilometers (52.8 miles) southeast off the coast of Ulsan, in the East Sea (Sea of Japan). The deposits were discovered in 1988 . Korea is heavily dependent on imports to fuel the country; the state-run Korea Gas Corp. is the world’s largest importer of liquefied natural gas. The country has been seeking natural resources near its shores since 1964, engaging major foreign oil companies like Gulf and Shell in 19 major projects, all of which were unsuccessful. “Korea has long dreamed of becoming an oil-producing country,” said Yi Ok-su, president of the oil corporation. “This marks the beginning of further development projects we will pursue both in Korea and abroad.” The Korea National Oil Corp. will produce an average of 1,000 tons of liquefied natural gas per day for the next 15 years ― an amount consumed by 340,000 Korean households daily. The gas will be provided exclusively to Ulsan, making up 60 percent of the city’s gas consumption. On a national level, the amount produced is equivalent to 2.2 percent of the country’s total gas consumption. The condensate, or light oil that is produced, will be provided to S-Oil, an Ulsan-based oil refiner, on a scale of 800 barrels per day. The Korea Institute of Industry and Technology Information said the mobilization of this gas bed would provide jobs for 43,000 workers and create added value of about 1.9 trillion won. It also said that the project would be a boon in developing engineering and heavy construction-related expertise. by Wohn Dong-hee, Lee Key-one