South Korea Expanding Gas Coop., Oil Purchase

South Korea Expanding  Gas Coop., Oil PurchaseSouth Korea Expanding  Gas Coop., Oil Purchase

A South Korean firm has signed an agreement to bankroll and develop part of Iran's gas production facilities, with Seoul's intake of Iranian crude witnessing a sharp rise in April compared with the same month of last year.

GS Engineering & Construction Group has signed two memoranda of understanding with the Industrial Projects Management of Iran on funding, management and implementation of Phase 14 of South Pars Gas Field in the Persian Gulf, director of market development at IPMI said.

"If funding for Phase 14 is provided, we can launch one gas sweetening unit of the phase by March 2018," Hamidreza Jalali said, adding that the phase has nearly made a two-third development progress.

Phase 14 is designed to produce more than 56 million cubic meters of gas and 75,000 barrels of gas condensates per day as well as 1 million tons of liquefied gas and 1 million tons of ethane a year.

GS E&P was previously active in Iran's gas projects in the south but it was forced to scrap operations due to sanctions.

The company was awarded a 1.37 billion contract in 2009 to complete phases 6, 7 and 8 of South Pars in cooperation with Pars Oil and Gas Company—a subsidiary of the state-run National Iranian Oil Company—by May 2013.

South Korean firms are strengthening their foothold in Iran's upstream petroleum projects. Korea Gas Corporation has signed agreements to build Iran Gas Trunkline (IGAT 9 and 11) and lay a subsea pipeline through the Persian Gulf to supply gas to Oman on the Arabian Peninsula.

The state-run company has also received the green light to conduct feasibility studies on Belal Gas Field in Hormozgan Province, southern Iran.

Jalali noted that Iran could also hire an international contractor for Phase 11 through tender.

Iran has turned to foreign finance and technology to draw more natural gas from South Pars, the world's largest gas field, which it shares with Arab neighbor Qatar.

The Persian Gulf country is determined to play a bigger role in the global energy market, as it has pledged to boost oil production capacity to its pre-sanctions level of 3.6 million barrels a day and ramp up gas output to 1.2 billion cubic meters a day by 2020.

------- Oil Exports

Iran and South Korea continue to show their strong economic rapprochement after the January lifting of sanctions by boosting their crude transactions.

South Korea's crude oil imports from Iran rose 113.5% in April from a year earlier, while its total crude oil imports rose 9.1% year-on-year to 89.7 million barrels last month, data by the Korea National Oil Corporation showed on Tuesday.

South Korea is considered one of the traditional customers of Iranian crude, along with China, Japan, India and Turkey.

Still, Iran was the fourth-largest oil supplier to South Korea in January-April after Saudi Arabia, Kuwait and Qatar and ahead of the UAE, data show.