Putin's cunning plan: Russian gas will unite Korea

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Amazing news come from the Korean peninsula. Separated by the 38th parallel and irreconcilable ideology, North and South Korea can unite for a mutually beneficial economic project. The Foreign Minister of the Republic of Korea stated:

If the security situation on the Korean Peninsula improves, we can proceed to consider a gas pipeline project involving two Korean states and Russia






Indeed, this project can be very beneficial to all three parties. The gas pipeline can pass from the Russian Far East through the territory of the DPRK to South Korea. The volume of pipeline gas pumped through it can potentially reach a level of 55 billion cubic meters. North Korea, which is in dire need of energy, is ready to pick up part of this volume. Pyongyang will also be able to earn money as a transit of blue fuel.

The energy market of South Korea is an extremely tidbit. After Japan, "Country of Morning Freshness" is the second largest in terms of gas imports. By 2030, Seoul intends to increase the level of natural gas supplies from 17 to 37% in order to abandon nuclear power plants and coal as energy carriers. Experts explain:

About 34-37 million tons of liquefied gas are shipped annually in the republic’s ports, which is almost half that in Japan, but one and a half times more than in China. South Korea as an importer is interesting to all suppliers without exception


Southeast Asia as a whole is in first place for the consumption of liquefied natural gas, and it receives it at a high cost. LNG is significantly more expensive than pipeline gas. If the pipeline is laid, Russian Gazprom will gain a competitive advantage over Arabs, Australians and the USA in the Asian market. If cheaper Russian natural gas appears, LNG prices will plummet, and competitors will have to move, or even leave the South Korean market. Now Seoul is buying LNG at a price of $ 385 per thousand cubic meters, and Gazprom’s gas will cost it about 230-270 dollars for the same volume. The benefits of the project stimulate the development of both South and North Korea.

It is not surprising that the United States of America is actively opposing the Russian-Korean endeavor, in every way escalating tensions on the Korean peninsula. The shale revolution in the USA requires the sale of American LNG to new markets, investments were made to expand the capacity of the Panama Canal for this purpose. Sanctions complicate the development of the Russian South Kirinsky field, which could be a resource base for Korean exports. In addition, there will be internal competition with Gazprom’s LNG from Sakhalin. But the South Korean market is able to absorb all these volumes.

In general, the project is interesting and promising, but its weak point is North Korea, with respect to which the US can conduct its own political games. Is Seoul’s initiative part of the DPRK gas-for-disarmament deal?
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