By Ryu Jin
Staff Reporter
A South Korean consortium led by Korea Gas Corp. (KOGAS) Monday signed a joint venture deal with Uzbekistan’s state-run gas company to develop a large-scale natural gas field in the Central Asian country.
According to the Ministry of Commerce, Industry and Energy and KOGAS, the consortium signed a memorandum of understanding (MOU) with Uzbekneftegaz (UNG) on the occasion of Uzbek President Islam Karimov’s visit to Seoul.
Located in Surgil, western Uzbekistan, the gas field is estimated to have more than 4 trillion cubic feet of natural gas reserves, according to experts. It is equivalent to 3.7 years worth of gas in South Korea.
The MOU was signed between the KOGAS and UNG, with South Korean Minister of Commerce, Industry and Energy Kim Young-joo and Uzbek President Islam Karimov attending the ceremony.
Karimov, accompanied by his secretaries and business leaders, is visiting South Korea on the occasion of the inauguration of President Lee Myung-bak.
A KOGAS spokesman explained that the consortium will set up a 50-50 joint venture with the UNG to develop the field and build a chemical plant, investing a total of $2 billion (roughly 1.8 trillion won).
``Tentatively named Uz-Kor Gas Chemical, the joint venture will not only develop the large-scale gas field but also build a chemical plant near the Aral Sea in Uzbekistan under the package deal,’’ he said. ``It is the first time that South Korea has secured development rights to energy resources in Central Asia by linking the project to industrial infrastructure building.’’
South Korea and Uzbekistan agreed on the Surgil gas field development project in March 2006, when Karimov visited Seoul to hold a summit with then-President Roh Moo-hyun, who stepped down Monday.
South Korea, which relies heavily on imports for raw materials, has recently sought the development of natural resources in various package deals.
``We expect to produce some 3 million tons of LNG (liquefied natural gas) a year,’’ a ministry official said. ``About two-thirds of the production will be sold to other countries through pipelines and the rest will be used to produce gas-based chemical products.’’
Lotte Daesan Petrochemical, LG Corporation, STX Energy and SK Gas are part of the consortium.