Bloomberg News

North Korean Leader Kim Backs Natural-Gas Pipeline, Russia Says

February 03, 2012

Feb. 3 (Bloomberg) -- North Korea’s new leader, Kim Jong Un, supports an agreement to build a natural-gas pipeline from Russia to South Korea via his communist state, the Russian envoy in Pyongyang said.

“All these existing agreements are supported by the new leadership in North Korea,” Russian Ambassador Valery Sukhinin said in a phone interview today from the North Korean capital. “Talks now are taking place between the parties implementing the project, from our side Gazprom, and from the North Korean side, the oil industry ministry.” OAO Gazprom is the state-run Russian gas-export monopoly.

Kim’s father, Kim Jong Il, who died in December, agreed to the gas pipeline at a meeting in August with Russian President Dmitry Medvedev near the Siberian city of Ulan-Ude. Russia said the energy deal was part of efforts to win concessions on North Korea’s nuclear-weapons program.

South Korea’s chief nuclear envoy said in an interview yesterday he is “optimistic” that inducements offered by the U.S. and his country will persuade the new North Korean leader to hold fresh talks aimed at persuading the isolated regime to give up the capability to produce atomic weapons.

The envoy, Lim Sung Nam, will travel to Moscow next week for talks with his Russian counterpart, Deputy Foreign Minister Igor Morgulov. Russian Foreign Minister Sergei Lavrov said on Jan. 29 that it was “absolutely realistic” to reconvene six- party talks by the middle of the year.

Stronger Ties

Russia and North Korea are stepping up ministerial contacts after a visit this month by the North Korean fisheries minister, Sukhinin said. The two countries may also hold another summit in the future, he said. Prime Minister Vladimir Putin, who traveled to Pyongyang in 2000 and hosted the late North Korean leader twice during his 2000-2008 presidency, is seeking a new term as president next month.

As far as the gas pipeline is concerned, “there is nothing more to talk about at the level of the two countries’ leadership as there is an agreement in principle,” Sukhinin said. “Instructions have been given, now we have resolve practical questions.”

North Korea’s deputy oil industry minister, Jeong Cheol Yong, visited Moscow at the end of November to hold the first meeting of the so-called joint working group with Gazprom charged with the project.

Russia wants to construct a pipeline that would carry as much as 10 billion cubic meters of gas a year to South Korea via the North, which would earn transit revenues. Russia may also build a power grid along the route.

Korea Gas Corp., the world’s biggest importer of liquefied natural gas, and Gazprom have been trying to identify a supply route since at least 2003, when they signed a cooperation accord.

Russia has also proposed a railway project that would connect the Trans-Siberian Railway to South Korea via North Korea, opening up an “Iron Silk Road” that would cut shipping costs of South Korean companies to Europe.

--With assistance from Sangwon Yoon and Peter Hirschberg in Seoul. Editors: Jennifer M. Freedman, Torrey Clark

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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