Branch of ESPO pipeline can turn to South Korea
The new large buyer of Russian oil and gas can appear in Asian region, as RBK Daily reports. South Korea became interested in possibility of importing oil by pipe-line “Eastern Siberia – Pacific Ocean”. Representatives of Korean National Oil Company (KNOC) carry on negotiations with “Transneft” about the building of ESPO pipe-line branch from Primorye through North Korea to South Korea. The oil pipe is supposed to be built in one corridor with gas pipe. These and other joint projects will be discussed on the level of Russian and South Korean presidents at the beginning of the next week: the President of South Korea Li Men Bak comes to Russia on September 28. Now South Korea gets import oil mainly from the Middle East countries. It requires 2.3 mln. barrels a day. Last year it increased purchase of Russian oil 2.7 times in comparison with year 2006, from 14 to 38.1 mln. barrels a year. Besides, there is an agreement between Korean Kogas and “Gasprom” about the South Korean purchases of 1.5 mln. tons of “Sakhalin-2”depressed gas from the year 2009 annually during 20 years. But these volumes of Russian oil and gas will not be enough in future. As KNOC representative in Moscow Mr. Mun Ben Khen says, with the view to diversificate carbohydrates import regions South Korea is thinking seriously about oil delivery from Russia, especially after ESPO second line launching. Now Russian oil makes up 4.5% of oil and oil products consumption in South Korea. But after ESPO second line launching import of Russian oil can increase if there is an agreement about attractive delivery prices. However, the building terms, the cost of the project and the pipe output are not marked yet because the project seems to be risky keeping in mind a difficult situation in North Korea. Besides, possibility that Korean financial organisations will take part in project crediting, that profile companies of the country will be contractors, equipment and material suppliers for building ESPO-2 is being discussed. “It is clear that the branch of ESPO will appear if an agreement between Korean companies and Russian oilmen about the oil price is achieved, and also if they pay for building”, - the vice-president of “Transneft” Mikhail BARKOV said. We would remind you that last December Koreans proposed to “Gasprom” the project of gas pipe-line building from Khabarovsk to Vladivostok and further through North Korea to South Korea. In view of it they applied to “Transneft” to evaluate the possibility of oil pipe building in one corridor with gas pipe-line, the branch of ESPO is supposed to begin in Nakhodka. At the same time still the destiny of another ESPO branch – to China is not clear because there is no agreement on fuel delivery cost through it. “Transneft” says that it is not inconceivable that if in the nearest time negotiations with China will not move forward “vacant” 15 mln. tons of oil can be promissed to Korean buyers.