The Hindu Business Line : South Korea to consider India's proposal for strategic gas swap

The South Korean Minister for Foreign Affairs and Trade, Mr Ban Ki-Moon, with the FICCI President, Mr Onkar Singh Kanwar, during a meeting in the Capital on Monday. - Kamal Narang

New Delhi , Aug. 1

, THE Union Petroleum Minister, Mr Mani Shankar Aiyar, said on Monday that South Korea has agreed to consider India's proposal for strategic gas swap arrangements.

This could include LNG and energy fuel produced from Russia's Sakhalin-1 block, which is expected to begin production later this year, and where India has a 20 per cent stake, he said.

Speaking to a press gathering after his talks with the South Korean Foreign Affairs and Trade Minister, Mr Ban Ki-Moon, Mr Aiyar, said, "India has suggested that South Korea could consider strategic gas swap, enabling both countries to off-take supplies at points closer to them. This could include gas and LNG supplies contracted by both countries."

The Minister said that while India could benefit by swapping arrangements with South Korea for supplies contracted from Sumatra in Indonesia and Australia, South Korea, in turn, could benefit by taking supplies from the Sakhalin-1 block.

Besides sharing gas from Sakhalin, India sees potential for swapping supplies from countries such as Papua New Guinea where it is seeking oil equity stakes. These gas and oil sources are closer to South Korea than to India.

India and South Korea have agreed to formalise an agreement later this year when the South Korean Energy Minister is expected to attend the second Asian energy roundtable with principal oil and gas sellers from Central Asian countries and Russia.

"We have also invited South Korea, which is a major importer of petroleum products, to invest in upstream and downstream sector," he said. India sees tremendous possibilities for South Korean investments in setting up export-oriented refineries not only to target supplies to Seoul, but also to third countries. So far, South Korean participation in the Indian energy sector has been restricted to vendors and service providers.

"I have also brought to his notice that India is a growing market for energy. Korean oil and gas companies have a presence here as vendors and service providers. Whereas, we really need them in the sector as investors and getting those investments into the country is going to be a major thrust area," Mr Aiyar said.

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