LNG Production from End of Next Year

Koreans will be able to use natural gas produced in Korea from the end of next year, making Korea an oil producer.

The Ministry of Commerce, Industry and Energy and the Korea National Oil Corporation held the ground-breaking ceremony of production facilities for `Donghae-1 Gas Field,` with the participation of President Kim Dae-Jung and Minister Shin Guk-Hwan on 15th.

Korea has continued to find out oil and gas fields in the continental shelf (under 200 meters in depth of water) around the Korean Peninsula since 1970 but Donghae-1 is the first one with economic efficiency.

Donghae-1 Gas Field is located in 150 meters under the sea, 58 km southeast from Ulsan, the total deposits of oil estimated as 200 billion square feet (converted 4 million tons of LNG).

The gas sales profit is expected to be 1 billion dollars (1 trillion 300 billion won) and the cost to develop the gas field is estimated about 300 million dollars.

KNOC will begin the production of LNG at the end of next year and supply 400,000 tons of LNG to the Ulsan-Kyungnam area for ten years.

Donghae-1 Gas Field can be used as a natural gas storage after completing the exploitation of gas. The construction of such gas storage facility may cost about 3-4 billion dollars.

Donghae-1 was found at first in the process of exploration drillings for a whale V structure in the continental shelf, 6-1 mining area, in July 1998 and the economic efficiency was proved in August 1999. KNOC has continued developing the gas field since February 2000.

The Ministry of Commerce, Industry and Energy and KNOC will set for additional exploring drills for oil and natural gas in the continental shelf areas.

Ja-Ryong Koo bonhong@donga.com