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July 04, 2009
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| Moscow has asked Seoul to readjust the price of the liquid natural gas that Russia began exporting to Korea this year after Russian government officials complained that the price agreed upon in 2004 is too low. But Seoul officials have refused to renegotiate the deal, which was sealed five years ago. According to officials of Korea’s Knowledge Economy Ministry and Korea Gas Corp., Russia recently made an official request to raise the price of the liquid natural gas from the Sakhalin gas reserve during the latest session of the Korea-Russia Joint Commission on Economic, Scientific and Technological Cooperation. The meeting was held in Seoul on July 1. Korea’s Finance Minister Yoon Jeung-hyun and V.F. Basargin, Russia’s Minister of Regional Development of the Russian Federation, attended the event. Russia signed the agreement with Seoul in 2004 to export 1.5 million tons of liquid natural gas each year for 20 years beginning in 2009 for about $25 a barrel. At that time, global oil prices, closely linked to liquid natural gas prices, hovered around $30 a barrel. But energy prices have dramatically soared since then. Crude oil prices have reached nearly $60 a barrel. According to officials, the current price tag on the imported liquid natural gas from Sakhalin is about 30 to 40 percent cheaper in Korea than the gas imported by other countries that signed similar agreements with Russia after 2005. But Korea insists the 2004 agreement between the two countries stands. “We refused the request from Russia, since the 2004 agreement has no clause that specifies that the two countries can reopen the agreement for price renegotiation,” said one senior Knowledge Economy Ministry official who declined to be named. But that does not mean Russia has no options left. The Russian official said Moscow may try to coax Seoul again by offering Korea other joint energy development projects in the future in exchange. “We will come up with responses after reviewing their proposals,” said the official. According to the Korea Gas Corp., Russia’s natural gas export deal with Japan has a clause that allows prices to be readjusted, and the two countries are currently negotiating to lift the price. The annual import of liquid natural gas from Sakhalin accounted for 5.5 percent of Korea’s natural gas consumption last year. By Kwon Hyuck-joo, Jung Ha-won [hawon@joongang.co.kr] |
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