South Korea, Japan Agree to Strengthen LNG, Crude Oil Cooperation

President Lee Jae-myung and Japanese Prime Minister Sanae Takaichi agreed at a summit in Andong, North Gyeongsang Province, to deepen bilateral cooperation in energy, including liquefied natural gas and crude oil. The move brings the two countries together in response to an energy security crisis driven by turmoil in the Middle East, as both rely heavily on imported energy.

Lee and Takaichi held a 105-minute summit at a hotel in Andong on May 19. The meeting was part of shuttle diplomacy and followed Lee’s visit in January to Takaichi’s hometown in Nara Prefecture.

In opening remarks, Lee said South Korea-Japan relations were advancing rapidly toward the future without pause. With the international situation growing more turbulent, cooperation and communication among partner countries were needed more than ever, he said. He added that both sides were increasingly aware of how important they are to each other as cooperative partners.

Takaichi said the international community was going through an extremely difficult period, including because of developments in the Middle East. She added that the two leaders’ stewardship should steadily advance the positive trajectory of Japan-South Korea ties and help both countries play a central role in stabilizing the Indo-Pacific region. The two leaders stressed the need for a joint response as regional dynamics shift, with a US-China summit held on May 14-15, a China-Russia summit set for May 20 and North Korea and Russia drawing closer militarily.

Lee also pointed to the symbolism of each leader visiting the other’s hometown. He said the two sides would broaden mutual understanding and connection while pursuing practical and breakthrough forms of cooperation without being bound by precedent or custom. He said he hoped the Andong summit would mark another step forward for what he described as the best period in bilateral ties. As Takaichi had personally welcomed Lee at his accommodation during the January trip to Japan, Lee greeted her at the entrance to the hotel where the summit was held.

In a joint press statement, Lee said both sides shared the view that instability in supply chains and energy markets stemming from the Middle East had heightened the need for close coordination. He said they agreed to expand supply-chain cooperation between the two countries.

The talks specifically covered LNG and crude oil, where the need for coordination has grown amid concerns over a closure of the Strait of Hormuz. Lee said the two countries would expand LNG cooperation based on an LNG supply cooperation memorandum signed in March. He added that they would also deepen information-sharing and communication channels related to crude oil procurement and stockpiling.

Korea Gas Corp. and JERA, the world’s first- and second-largest LNG buyers, had earlier agreed to manage stable supplies, including by exchanging LNG carriers. Japan holds 470 million barrels of crude stockpiles, more than South Korea’s roughly 190 million barrels. South Korea’s refining capacity stands at 3.4 million barrels a day, ahead of Japan’s roughly 3.16 million barrels a day, and its refining technology is also more advanced. Industry officials say South Korea’s refining capacity and Japan’s stockpiling capability could provide a foundation for energy cooperation. Takaichi also proposed strengthening resource supply-chain cooperation with other Asian countries, and Lee agreed to take part.

Lee said genuine peace and stability in Asia require South Korea, China and Japan to respect one another, cooperate and seek common interests.

Kim Hyeong-gyu / Han Jae-young, reporters / Tokyo: Choi Man-su, correspondent khk@hankyung.com