Russian gas imports start in April

Korea will bring in 1.5 million tons of liquified natural gas per year from Russia starting in April to ensure a steady supply of the vital fuel resource, the government said yesterday.

The Ministry of Knowledge Economy said the 20-year import deal with Sakhalin Energy, which recently began operating a new LNG refining plant, will reduce the country’s dependence on gas from the Middle East and Southeast Asian countries. Reliance on a few countries has weakened Seoul’s bargaining position, leading to sharp price fluctuations.

The gas will come from the “Sakhalin 2” project, which refines gas from two offshore fields east of Sakhalin Island. Of the 9.6 million tons of gas that can be produced annually, almost all will be sold to Korea and Japan. The project is jointly owned by Russia’s state-run Gazprom, Shell, Mitsui and Mitsubishi.

The ministry added that because it takes just three days for an LNG tanker to reach the country from Sakhalin, the new arrangement will greatly reduce transportation costs and will help the country meet any spikes in demand.

Chae Hee-bong, head of the ministry’s gas industry division, said if a proposed pipeline linking Korea and Russia is built, more than 7.5 million tons of Russian gas can be brought into the country per year from 2017 onward. Yonhap