October 14, 2008

South Korea, East Timor Agree on Gas Development, Export

Text of report in English by South Korean news agency Yonhap

SEOUL, Oct. 14 (Yonhap) - East Timor signed a memorandum of understanding (MOU) that could permit the export of gas from its Greater Sunrise well to South Korea by 2013, the government said Tuesday.

The pact was reached in Dili and marks the first time that East Timor, which gained independence in May 2002, has signed an energy- resources pact with a foreign country, the Ministry of Knowledge Economy said.

The MOU outlines giving South Korea top priority in the import of future gas production, and places local companies in a good position to conduct explorations of other prospective wells.

A consortium led by Korea Gas Corp. (KOGAS) is currently conducting surveys in six offshore wells in the joint petroleum development area (JPDA) that lies between the Southeast Asian country and Australia.

KOGAS, Samsung Corp. and LG International Corp. are also engaged in pursuing LNG projects and a dimethyl ether production facility.

The JPDA, also known as the Timor Gap, could potentially produce 30,000 barrels of crude per day and large quantities of gas. The Greater Sunrise field may hold enough gas to meet seven years worth of South Korea's energy needs, although more exploratory surveys have to take place to determine the exact size of the reserve.

The ministry in charge of energy said the agreement lays the foundation for expanding bilateral resource cooperation and could give South Korea an edge in oil and gas exploration in East Timor.

Exact details on when gas can be imported will be decided at future meetings.

South Korea is the largest importer of natural gas in the world, with most of its supply coming from Southeast Asia. It is currently in the process of diversifying imports to cushion itself from sudden price fluctuations.

Originally published by Yonhap news agency, Seoul, in English 0340 14 Oct 08.

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