Russia firms up gas deal with S.Korea on Medvedev visit

10th November 2010, Comments 0 comments

Russian President Dmitry Medvedev called on Seoul Wednesday to help modernise his country's energy-focused economy as gas firm Gazprom said it could massively ramp up supplies to South Korea from 2017.

"Russia is interested in the arrival of Korean investors. They bring in modern technologies and introduce a modern culture of production," Medvedev told Korean and Russian businesspeople during an official visit to South Korea.

"For us it is no less important to learn from our partners and establish with them the so-called modernisation alliances," said Medvedev, who is also set to attend the G20 summit on Thursday and Friday.

Medvedev has made modernisation of Russia's economy a top priority of his presidency, seeking to lessen its dependence on oil and gas exports.

His call on Korean business to share hi-tech know-how and expertise came as Russian gas giant Gazprom said it would next month start talks with South Korea's Kogas to deliver at least 10 billion cubic metres (350 billion cubic feet) of natural gas a year to South Korea from 2017.

"We currently see a growing market in Korea," Gazprom's chief executive Alexei Miller told reporters. "Our partners are interested in increasing gas supplies."

An official in the Russian delegation said a preliminary gas deal was signed in Seoul on Wednesday.

Miller said the delivery method -- a pipeline, compressed gas or liquefied gas -- had yet to be agreed and gave no details on the value of the contract.

When an initial agreement was signed in 2008, an official quoted by Yonhap news agency said the imports would be worth about 90 billion dollars over three decades.

South Korea now imports 1.5 million tonnes of liquefied natural gas from Russia every year but as one of the world's largest consumers of natural gas it is trying to diversify its sources from Southeast Asia and the Middle East.

Russia for its part is seeking a broader consumer base beyond Europe, which wants to cut its reliance on Russian gas.

Miller said Europe would remain the priority market for Russian gas but added Russian supplies to Asia could reach the same levels as Europe in "a very short time."

Medvedev stressed that bilateral cooperation should beyond energy as he oversaw the signing of a cooperation agreement to modernise the Russian economy.

"This is no less important that the very significant volumes of energy cooperation," Medvedev said after talks with his South Korean counterpart Lee Myung-Bak.

Lee said the agreement was in both countries' interests. "We need each other," he said.

Other agreements signed during Medvedev's visit include a sea transport cooperation pact and a memorandum of understanding between South Korean steelmaker POSCO and Mechel, a leading coking coal producer in Russia, to cooperate on developing natural resources.

Medvedev also urged North and South Korea to start talking again, saying better relations were crucial to "ensuring regional peace and stability", according to a joint statement issued by Seoul's presidential office.

Medvedev's foreign policy aide Sergei Prikhodko told reporters ahead of the visit the Kremlin chief would seek to promote infrastructure projects involving South and North Korea including a trans-Korean railroad.

The Kremlin did not say whether those projects were discussed on Wednesday.

© 2010 AFP

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