Posted on 08/16/2011 8:07:21 AM PDT by bananaman22
There apparently is something about building pipelines that causes otherwise rational oilmen to indulge in reveries that would give an opium addict pause.
Two of the most recent ideas for pipelines with a less than rational basis are Nabucco (less than 25 percent of the necessary throughput committed thus far) and the Trans-Afghanistan-India-Pakistan pipeline (running through a country wracked by 32 years of civil war), with the past decade seeing NATO fruitlessly attempting pacification.
Now a third surreal energy corridor has been added, a proposed Russian-South Korean natural gas pipeline transiting Kim Jong-Il’s socialist paradise on the Yalu.
What is perhaps most extraordinary is that this line has been proposed by the Russians, normally a most pragmatic bunch.
In 2009, according to the CIA, South Korea imported 32.69 billion cubic meters of natural gas, and the country has paltry reserves of 50 billion cubic meters, which, assuming that they were fully exploited, would last the country for a mere 18 months or so before running out completely.
North Korea? According to the CIA’s 2010 estimates, natural gas reserves – zero, imports – again, zero.
According to the U.S. Energy Information Administration, South Korea's demand for natural gas will grow by 1.4 percent per year up through 2035, led by strong growth in the electric power sector. The share of the country's natural gas consumption used for electricity generation is projected to increase from 39 percent in 2007 to 48 percent in 2035.
Given South Korea’s lack of domestic reserves, the country is one of the top energy importers in the world and is the world’s second largest importer of both coal and liquefied natural gas (LNG). As South Korea currently has no international oil or natural gas pipelines, it relies exclusively on tanker shipments of LNG and crude oil.
So, a Russian-South Korean natural gas pipeline makes a certain amount of sense – on paper. Earlier this week, South Korea’s Ministry of Foreign Affairs head Kim Sung-Hwan visited Moscow, and one of the main items during his negotiations was the construction of a natural gas pipeline from Russia through North Korean territory.
On 11 August Russian Federation Foreign Minister Sergei Lavrov announced that Moscow is prepared to give the project political support, telling reporters, “The tripartite projects were discussed today in my talks with the Minister (Kim). These projects involve the erection of a gas pipeline from Russia to the Republic of Korea via the DPRK, the construction of power transmission lines along the same route and the potential connection of the Trans-Korean Railway to the Trans-Siberian Railway. Contacts are now being held at the level of heads of gas companies of the three countries - so far in a separate format: Russia-DPRK and Russia-ROK (Republic of Korea) - to discuss gas pipeline construction prospects. I think that if the experts agree at the corporate level, political support will be provided in all three capitals. Full article at: Russian Pipeline Transiting North Korea Somewhat Unlikely
Who in their right mind would invest capital in North Korea?
Note: this topic is from August 16, 2011. Thanks bananaman22.Gas Pipeline Through N.Korea 'Part of a Bigger Game'Pundits say the project is a tactical move by Russia, which finds itself in fierce competition with China.
chosun.com
Friday, August 26, 2011
Russia has bickered with China over the export price of Siberian gas since 2008, but their negotiations have reached a stalemate due to Chinese demands for a drastic price cut.
Russia could now be attempting to pressure China by tapping South Korea and Japan as alternative markets for its natural gas, observers in China say.
In 2006, Russia signed an agreement with China to export its Siberia natural gas to the neighboring country...
Russia proposed US$400 per 1,000 cubic meters based on international oil prices, but China offered $200 based on global coal prices. In the eighth round of price talks in mid-August, Russia went down to $250, with $40 billion payable in advance, but China still refused.
South Korea has gas reserves equal to 18 months of its imports. Of course the Norks will agree to a pipeline through their territory.
Such a pipeline will allow them to wait until the South is critically dependant upon it.
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