N Korea interested in gas pipe project to S Korea: Russian president

Pyongyang is interested in participating in a project to build a 10 billion cubic meter/year pipeline from Russia to South Korea via North Korea, Russian President Dmitry Medvedev

said Wednesday after a meeting with North Korean leader Kim Jong Il in the Siberian city of Ulan Ude.
"With regard to gas partnership, there are results. We ordered our agencies to create a special commission to determine concrete parameters on a bilateral basis for gas transit via North Korea and, respectively, to include South Korea in this project," Medvedev said on the Rossiya 24 TV channel.
"[North Korea] is interested in a trilateral project with Russia and South Korea," Medvedev said.
The 1,100 km (682 mile) pipeline project is expected to carry up to 10 Bcm/year of Russian gas to South Korea via North Korea and can be expanded if there is adequate demand, Medvedev said.
Kim also told Medvedev that North Korea is ready to resume the six-party talks aimed at resolving the nuclear problem in the Korean peninsula, the president's press secretary said, according to Russian news agency Prime.
The last round of six-party talks in 2008 also included South Korea, the US, China and Japan.
Kim has been traveling through the Russian Far East and Siberia by armored train since Saturday.
Ahead of his visit, Russia announced that it will send 50,000 mt of wheat to North Korea to help the country handle a food shortage.
Russia considers North Korea, with which it shares a border, as a possible transit route for future supplies of its gas to South Korea.
Earlier this summer, various senior executives from Russian gas giant Gazprom held high-level meetings in North Korea and Moscow to discuss cooperation in the energy sector.
In early August, Gazprom said it soon expects to sign a road map with South Korea's Kogas on gas deliveries that would lay out the necessary steps needed to implement a pipeline project.
In 2008, the two companies agreed on supplies of at least 10 Bcm/year of Russian gas starting from 2017 in 2008 but they have yet to firm up a delivery route.
Gazprom has said that a pipeline via North Korea is the most economically efficient route for the future supplies.
But this is likely to face obstacles due to the hostile relationship between the two Koreas and North Korea's controversial nuclear and missile programs.
Another option that has been considered is an underwater pipeline from Russia to South Korea, but Gazprom officials have ruled it out as such a plan would face numerous technological difficulties.
The third option is supplying gas to South Korea in the form of LNG.
Kogas currently imports 1.5 million mt/year of LNG from Russia's Gazprom-led Sakhalin 2 project under a 20-year contract that began in April 2009.
Source: Platts