On Thursday, South Korean President Moon Jae-in, who took office in May, addressed the Korber Foundation in Berlin. He talked about the path towards a peaceful Korean peninsula and stressed that greater economic cooperation with North Korea is an important foundation to the establishment of peace there.
Jae-in, who is affiliated to the South Korean Democratic Party, said that he has planned a “new economic map for the Korean Peninsula,” which will be put into action if there is progress on the North Korean nuclear issue.
The plan includes a fresh connection between the South and the North across the military demarcation line, an “economic belt” which would “establish an economic community where the two Koreas prosper together,” the Korea Herald reported Jae-in as saying.
“South and North Korea will prosper together as a bridging country connecting the Asian mainland and the Pacific. The South and the North need only to implement the Oct. 4 Declaration together. Then the world will see a new economic model of an economy of peace and co-prosperity,” the South Korean President said.
Back in 2008, Moscow and Seoul reached a preliminary agreement on the delivery of Russian gas and negotiations with North Korea about transit began in 2011, when Russia’s Gazprom and South Korea’s Kogas signed a roadmap for the project’s construction.
The proposed pipeline is planned to be at least 1,100km in length, at least 700km of which would pass through North Korean territory. According to Gazprom, it would have a capacity of at least 10 billion cubic meters per year.
The project appears to be a win-win for all concerned: Russia would gain a new export market, North Korea would benefit financially as a transit country and South Korea would receive a stable and more economical supply of gas.
Konstantin Simonov, Director General of Russia’s National Energy Security Fund says that the pipeline represents a better deal for South Korea than the liquefied natural gas (LNG) it currently imports from overseas.
Simonov said that the prospects for the project are dependent on inter-Korean relations.
Despite that, traditional objections to the project have also been raised, Simonov said.
“Opponents have named the traditional arguments against the gas pipeline: that South Korea will become dependent on this pipeline and that North Korea will blackmail, manipulate and may even block the transit. However, it should be noted that South Korea has LNG terminals, so if the gas pipeline is disconnected, it won’t not be cut off from energy resources. When the country has another source of gas, there is no sense in turning off the pipe.”
Simonov said that one of the sticking points of the project is disagreement between Gazprom and Kogas over who bears responsibility for the transit across North Korea and therefore who bears the risk. This time round, the same issue is likely to arise.
While the future of the pipeline project is still unclear, Gazprom and Kogas have signed several energy agreements to import more Russian LNG from the Sakhalin-2 project, which currently provides 1.5 million tons of LNG per year to South Korea.
Most recently, in December the parties signed a deal to increase cooperation including joint projects in LNG production, transportation and regasification and in gas-fired power generation.