CAPITAL: SEOUL
MONETARY UNIT: WON
REFINING CAPACITY: 2,560,100 BC/D
OIL PRODUCTION: NONE
OIL RESERVES: NONE
GAS RESERVES: NONE

South Korea took a step in 2000 toward joining the ranks of countries with commercial hydrocarbon production.

State-owned Korea National Oil Corp. was preparing to bring on stream Donghae-1 (formerly known as Gorae) gas field in the Ulleung basin 60 km off Ulsan.

The field, on Block 6-1 on the Korean continental shelf, was confirmed as commercial after two appraisal wells were drilled.

Donghae-1 was estimated to have 250-300 bcf of gas in place. Reserves were pegged at 170-200 bcf, the equivalent of 4-5 months of South Korea's consumption of LNG imports.

Production was due to begin in July 2002. Plans included the construction of a production platform and related facilities, a pipeline to shore, and an onshore underground storage facility. KNOC planned to supply the gas to southeastern South Korea's Kyounsangnamdo region.

A Royal Dutch/Shell unit acquired Block 6-1 rights in 1970. It drilled one well and withdrew from the block in 1976. During 1983-95 KNOC drilled 10 wells with five of six wildcats yielding noncommercial gas shows.

KNOC reevaluated the block in 1996-99 and applied a new play concept that targeted a less-deformed geological formation of an earlier age. KNOC then discovered Gorae V (Donghae-1) gas field in 1998.

The company said the field was geologically analogous to the Subei basin and to Pinghu gas and condensate field in the East China Sea.

Downstream

South Korea's largest industrial conglomerate, the Hyundai Group, was planning to build a petrochemical complex in North Korea by 2008. It would be part of a government project to establish a special economic zone at Kaesong, 8 km from the border with South Korea.

Hyundai said the petrochemical complex was in the early stages of planning.

A joint venture of Texaco Inc. and LG-Caltex was selected as the preferred bidder to buy two gas-fired cogeneration plants from Korea Electric Power Corp. of South Korea.

LG-Caltex was a joint venture of South Korea's LG Group and Caltex Corp.

The Anyang and Puchon plants were being sold as a unit. The divestiture was part of the government's plan, initiated in July 1998, to privatize South Korea's electric power industry.

El Paso Energy International Co. was acquiring a 50% interest in Hanwha Energy Co. Ltd., South Korea. The company was making a $100 million investment in Hanwha in exchange for the interest. Hanwha operated a 1,800-Mw power plant in Inchon.