S Korea Signs Iranian MOUs
Iran and South Korea signed about 44 memoranda of understanding (MOU) during the historic visit of president Park Geun-hye's visit in May 1-3 to Tehran, including deals on pipelines, LNG, power and petrochemicals.
LNG exports, gas market cooperation and transfer of experience in the field of gas trade were the main topics of the letter of understanding signed between the National Iranian Gas Exports Company and South Korea’s Kogas.
Kogas signed a MOU with the National Iranian Oil Company (NIOC), the National Iranian Gas Company (NIGC) and the National Iranian Gas Export Company (Nigec) for comprehensive and strategic cooperation in the natural gas industry sector.
The three will jointly consider developing new gas fields, onshore liquefaction plants and floating LNG (FLNG) terminals in Iran and constructing gas pipes. They will also establish a close partnership for global marketing of LNG.
Iran prefers to export gas as LNG to distant markets, but for regional markets, pipelines are on the agenda. The country has a 10.4mn mt/yr LNG project, 60% complete and expected to start in 2019.
A separate agreement was also signed for engineering services for two key gaslines for Iran – Iran Gas Trunk-Line (Igat) 7 and 9. The former is more than 70% done and is planned to take 100mn m3/d of natural gas from the energy hub of Assaluyeh in southern Iran to the southeastern province of Hormozgan and Kerman as well as the southeastern province of Sistan-Baluchestan. The pipeline is projected to deliver 22mn m3/d of gas to Pakistan, but 180 km of the route are yet to be constructed.
Igat 9 is a $6.5bn project, planned to take 100 mn m3/d from Assaluyeh to Iran’s border with Turkey in the northeast for future exports to Europe. Kogas will also review the Iran-Oman offshore gas pipe construction project, which will be placed an order in the near future.
Oman and Iran has finalized the route for export of Iranian gas to the Sultanate after studying four possible routes. Tehran will export its gas to Oman through a 176-km gas pipeline and it could plunge as deep as 290 m underwater before reaching Oman. In 2013, the Sultanate and Tehran signed a contract to export gas to Oman. The $60bn contract was to last for 25 years and the two countries have signed basic agreements based on which Iran will export a daily amount of 28mn m3/d of gas to the Sultanate.
Kogas also secured an MOU with the NIOC to work on the Balal gas field in the Persian Gulf. Following technical studies, Kogas will present its proposals for the field’s development to the NIOC. The proposals will also consider the production of LNG.
Meanwhile, Korea Electric Power Corporation (Kepco) signed MOUs with Iran Power Generation and Transmission Company (Tavanir) for establishing smart power networks, utilizing advanced metering infrastructure (AMI), reducing power loss, improving electricity equipment efficiency, and conducting research related to the power industry.
Official data show the Iran-South Korea trade value stood at $6bn at the end of 2015, half the level of 2011, as a result of sanctions against Iran over its nuclear program.
Last year, South Korea imported $2.2bn-worth of crude oil from Iran, down 51% from the previous year and far lower than $9.36bn in 2011, according to Korea Times.
Iran Desk