Updated Mar.21,2007 09:56 KST

China Snatches Natural Gas From Under Korea's Nose

Lauded Energy Achievement is Actually a Disaster
The government¡¯s mid and long-term plan to diversify energy import sources has met an unexpected obstacle since China is about to buy all natural gas in wells in Burma¡¯s offshore area. The wells were explored and developed by Daewoo International and the Korea Gas Corporation with a 70 percent stake. Korea hoped to secure one more direct energy import source as part of its plan to reduce its reliance on Middle Eastern energy. But the Burmese government¡¯s decision to sell all the gas to China deals a devastating blow to Korea¡¯s plan. The Burmese well holds a gas reserve of 4.5 to 8.5 trillion cubic feet, the largest among overseas gas reserves Korean companies have developed.

The Ministry of Commerce, Industry and Energy on Wednesday said Burma recently decided to sell to China the right to purchase natural gas developed in the A1 and A3 gas wells off its northwestern coast. A senior government official said the official announcement is pending, but Burma accepted China¡¯s offer to install pipelines linking the two countries for free.

A government official said this was tantamount to China ¡°intercepting¡± an energy resource developed with Korean money and technology. ¡°Basically, the government¡¯s diplomatic efforts to consolidate the nation¡¯s energy independence have failed,¡± he added. In addition to the Korean companies, Indian Oil and the Gas Authority of India participated in the consortium to explore the oil wells, which will produce natural gas starting 2009. In a bid to boost its energy independence, the Korean government had planned to directly import 2.7 million tons of natural gas a year, more than 11 percent of last year¡¯s imports.

The government dispatched a delegation led by the ministry¡¯s Trade Investment Director Lee Jae-hun to persuade Burma to directly sell the developed gas to Korea. Korea offered incentives like supporting the establishment of electricity infrastructure in the Southeast Asian country. But it failed to buy agreement in the face of China¡¯s all-out efforts. ¡°On the day we arrived in Burma, a Chinese delegation led by Chinese State Councilor Tang Jiaxuan arrived there,¡± a government official said. ¡°We realized that Korea¡¯s diplomatic power just wasn¡¯t strong enough to beat China.¡±

(englishnews@chosun.com )

Copyright (c) 2007 The Chosun Ilbo & Digital Chosun Ilbo All rights reserved.
Contact letters@chosun.com for more information.
Privacy Statement Contact privacy@chosun.com