Talks are back on for a pipeline that would transport Russian gas to South Korea. South Korea already has a huge appetite for natural gas, and is getting even hungrier as it plans to nearly halve its nuclear power production. Russia is looking east to export its enormous energy reserves, having been rebuffed by a sluggish European market that is increasingly going elsewhere for its gas. If those were the only two variables in this equation, the pipeline would already have been built, but South Korea has the unenviable challenge of having a despotic lunatic in charge of its northern neighbor. The FT reports:
Park Geun-hye, the South Korean president, has promised to expand economic co-operation with Pyongyang as part of her “trust-building” strategy. The only surviving inter-Korean economic project, the Kaesong Industrial Complex in North Korea, reopened last month after a five-month suspension….“Technically the project is possible but it would require a very different situation on the Korean peninsula,” [said Andrei Lankov at Kookmin University]. “[Seoul and Pyongyang] should be on friendly terms for five to 10 years, undertake a number of joint projects, and then Russia would take the risk.”
North Korea would get a valuable source of revenue through transit fees for the Russian gas, and could threaten to close the pipeline whenever it wanted to make a power play on the international stage. An underwater pipeline that would bypass North Korea is also in the cards. That would be much more expensive, but it could be considered worth it to deny the Norks that kind of leverage.
[Pipeline image courtesy of Shutterstock]