Russia Could Resume Crude Oil Shipments to North Korea

North Korea and Russia are seeking for cooperative measures on energy by using railways. It shows that it is probable for Russia’s oil supply to North Korea, which was blocked in 1990, to resume.

The new Russian railway company RZD’s president, Gennady Fadeyev, who is currently visiting Far East Asia, said on March 22, “Russian companies are planning to invest in the joint railway project connecting Hasan, Russia, and Najin, North Korea, and we would like to use this railroad for oil transportation.” Fadeyev said, “It is under way based on the consultation of the concerned parties,” showing that North Korea has already agreed to this project.

Both countries agreed to connect railroads after they are upgraded, connecting Hasan, Russia, Duman River, Sunbong, and Najin in North Korea, with a total length of 56 kilometers, but their plan has not been backed with financial support. Recently, some Russian companies have formed a consortium to invest actively in this project. The purpose is to utilize the Seungri Chemical factory in the Najin-Sunbong Area, North Korea`s largest oil refinery. The factory was built in 1979 with the former Soviet Union’s support and has capability of refining two million tons annually, but after Russia stopped supplying crude oil to North Korea in the 1990s, the factory became vacant. In contrast, Russian oil companies find it hard to discharge Siberian crude oil due to a lack of refinery facilities in the Far East.

What the Russian refinery facilities have in mind is that once the railways are connected, crude oil will be sent to the Seungri Factory for refining, and it is, in turn, sent to Russia. It also benefits North Korea, which is suffering from an energy crisis, because money for the refinery process can be sent to North Korea in the form of crude oil.

Ki-Hyun Kim Jin-Hup Song kimkihy@donga.com jinhup@donga.com