Gas pipeline from Russia to South Korea would cost $195M

SEOUL, Oct. 25 (UPI) -- South Korea may have to pay nearly $200 million to North Korea for a gas pipeline from Russia, officials said.

Korea Gas Corporation said each year South Korea can have 7.5 million tons of gas transported through 746 miles of pipeline from Russia to the South via North Korea.

The KGC calculated the transit fee in a report submitted to a lawmaker of the opposition Liberty Korea Party, according to Yonhap News. The public gas company predicted that $158 million will be paid to North Korea annually, with additional fees paid per total shipped gas.

The company calculated the fee based on a past contract between Gazprom and Ukraine and Belarus and Slovakia. The agreement indicated that it costs $2 to transport 35,314 cubic feet of natural gas for the length of 62 miles.

The plan for transporting gas from the Far East has been discussed since the 1990s, but it has never been materialized due to political uncertainty over North Korea's development of nuclear weapons and the high investment cost, according to a 2017 report by the Korea Energy Economics Institute.

As the relationship between North and South Korea began to improve, South Korean President Moon Jae-in and Russian President Vladimir Putin agreed to conduct a joint study on the issue at a summit in June.

South Korea's KGC and Russia's Gazprom undertook a joint study on a line that transports natural gas from Russia via North Korea.

The KGC said the study doesn't breach international sanctions on North Korea and examines feasibility for construction, according to Hankyoreh.