"Supply levels are expected to be about 10 billion cubic meters [of natural gas] a year," Alexei Miller said. "But since a long-term contract is due to be signed for [a period of] over 30 years, the amount of deliveries may be increased."
Earlier Tuesday, Russian and South Korean officials signed an intergovernmental agreement on cooperation in the gas industry.
Speaking after the signing ceremony in Seoul, Miller said the accord will pave the way for commercial negotiations between his company and Kogas, South Korea's state-controlled natural gas monopoly.
"We immediately got down to talks on terms for gas deliveries from Russia to South Korea," the Gazprom CEO said, adding that the timeframe and the pipeline route are the two most important points to agree on.
Deliveries will tentatively start in 2012-13, either via an overland pipeline, to cost an estimated $2 billion, or through a more expensive submarine pipeline.
Kogas executives outlined to Gazprom partners their basic approaches to developing cooperation in areas such as distribution of liquefied natural gas (LNG), construction of gas liquefying facilities in Eastern Russia, introduction of new technologies to produce synthetic fuels from natural gas, and production and marketing of gas in third countries.
The Russian delegation, for its part, identified what it sees as especially promising areas for cooperation with Kogas in Eastern Russia, including distribution of natural gas, as well as products received through processing, in South Korea and other markets of Asia and the Pacific Rim.
South Korea now relies almost entirely on importers for its liquefied natural gas needs. It has a well-developed gas transportation network, linking coastal LNG terminals to key consumption centers across the country. This makes it possible to extensively use natural gas not just in electricity production, but in manufacturing and public utilities as well.
