Russia, South Korea expand business relations

A large new energy complex in the far eastern region of Sakhalin will expand economic cooperation between Russia and South Korea.

The Sakhalin oil and gas project could be just the start of a much bigger partnership with road construction, power plants and sea port upgrades also on the agenda, says Sakhalin Region Governor, Aleksandr Khoroshavin.

“Russia has a large project to offer South Korea. We want to build a diversified energy complex in the Sakhalin region. It’s a big project which includes oil and gas development, coal extraction and the construction of a big power plant. We also need to build the infrastructure like motorways and railroads.”

Russia needs to attract almost $5 billion to build such an energy cluster and hopes that much of it can come from South Korea. In Seoul everything shows what an innovative economy really looks like. But there’s something it wouldn’t work without and that is Russian gas.

Russia supplies 45% of oil and 16% of gas to South Korea from the fields at the Sakhalin region. South Korea, in turn, offers innovation. The Sakhalin 1 and 2 oil-and-gas projects relied heavily on South Korean technology. Korea was the main supplier of equipment for an offshore platform and the first LNG plant in Russia – as well as its first customer, explains Sakhalin Energy CEO, Andrey Galaev.

“Many assets of our projects are examples of innovative technology, including our offshore platforms that have been built in Korea. It’s very modern technology and almost $1.5 billion has been invested and this is the scale of work that has been done by our Korean partners.”

But Russia and South Korea want to go beyond the limits of oil and gas. With the need for almost limitless infrastructure – there will be enough business to go around.