Iran and South Korea are poised to sign three memoranda of understanding in the energy sector during the upcoming visit of South Korean President Park Geun-hye to Tehran next month, an official at the Oil Ministry said on Sunday.
"A major MoU will be signed between the two countries' oil and energy ministers, with the two other agreements involving the National Iranian Gas Export Company and the National Iranian Gas Company," Marzieh Riahi, director for Asia-Pacific affairs at the Oil Ministry, was quoted as saying by Shana.
According to a government official, the South Korean leader will arrive in Tehran on May 1 for a three-day visit to explore grounds for cooperation on far-reaching areas that also include banking, insurance and healthcare, as well as exchange of knowledge and culture.
Seoul launched active dialogue with Iran after the Middle East nation reached a landmark agreement with six world powers in July 2015 over its nuclear program. Park is expected to approve a slew of economic and energy agreements the two sides have been working on over the past few months.
South Korean companies are keen to operate in Iran's upstream exploration and production projects, including the country's top-priority mission to accelerate output from joint oilfields by implementing enhanced oil recovery techniques.
The two sides also hope to build on their already strong bonds in the crude oil market. South Korea is world's fifth-largest crude importer and the fourth largest customer of Iran's crude after China, India and Japan.
Its import of Iranian crude surged 81% in March from the same month a year earlier, after sanctions against the Persian Gulf country were lifted in January.
South Korea said it planned to increase imports of Iranian oil this year to meet growing demand, especially of condensate, a super light oil that can be processed into fuels and petrochemicals.
Expanding Nat'l Gas Network
In addition to talks on transfer of technologies, South Korea can help fast-track the development of Iran's expansive gas network.
According to Riahi, a deal could be wrapped up during Park's upcoming visit to hand over the construction of Iran Gas Trunkline-9 and 11 to South Korean contractors.
Sitting on the world's largest gas reserves in the Persian Gulf region, Iran plans to promote natural gas as its primary energy source by laying an additional 5,000 kilometers of pipeline across the country by the end of its sixth five-year development plan (2016-21). The goal requires an estimated funding of $15 billion.
Iran's national gas pipeline extends by more than 36,000 kilometers. The government plans to nearly double the stretch in the long run in line with the gradual rise in gas output expected to exceed 1.2 billion cubic meters per day by 2020.
According to reports, investment opportunities in the petrochemical sector as well as new liquefied natural gas production plants will be discussed between the two countries next month.
