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Tehran — Tehran and Seoul Sunday signed gas agreements, including for futureexports of LNG, during an historic visit to Iran by the South Korean PresidentPark Geun-hye, oil ministry news service Shana reported.

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LNG exports, gas market cooperation and transfer of experience in thefield of gas trade were the main topics of the letter of understanding signedbetween the National Iranian Gas Exports Company and South Korea's Kogas.

Iranian oil minister Bijan Namdar Zanganeh and South Korea's minister ofland, infrastructure and transport Kang Hoin meet Sunday on the first day ofthe three-day visit by the high-level South Korea delegation.

Currently, Seoul buys 400,000 b/d of crude oil and gas condensates fromIran, Zanganeh said after the meeting.

Before the removal of international sanctions that had capped Iran's oilexports at 1 million b/d from around 2.3 million in 2012, Zanganeh said thefigure stood only at 100,000 b/d.

"Sales of crude oil and gas condensates to South Korea have increased by300,000 b/d and reached 400,000 b/d," Zanganeh was quoted as saying.

He pointed to "still-existing bank problems" with South Korea and saidthat the issue was being solved.

The international sanctions against Tehran's disputed nuclear program hadalso targeted the country's banking interactions with the global system.

Despite the deal between Iran and six world powers -- Britain, China,France, Germany, Russia and the US -- that took effect January 16 to removethe sanctions, Iran has not been able to reconnect to the system. The problemis preventing Iran from accessing the payments from its sales to customers.

"Iran LNG, development of second phase of South Pars phase 12, Bid Bolandgas plant, NGL and also Bahman ultra-heavy crude refinery are among projectsthat South Koreans are interested in," Zanganeh said.

"Iran has told South Korean companies that in order to continue withtalks on LNG projects they should agree to buy the product and they haveagreed. Therefore, talks in this regard will continue," he added.

Iran, which has the world's second-largest gas reserves after Russia,plans to play a role in the global gas market by exporting gas via pipeline toits neighbors and as LNG to buyers overseas. Construction of the only LNGplant in Iran -- Iran LNG -- has been delayed primarily due to the sanctions,which prevented foreign investment and advanced technology entering the energysector.

FINANCING PROJECTS

After oil sales, Zanganeh said the second part of cooperation relates tothe financing of projects. "I think there will be a major opening in thisregard during this visit," Zanganeh said. Exploitation of oil as well as investment in petrochemicals are two otherareas the two countries can expand their collaborations in, Zanganeh said. Park is scheduled to hold talks with her Iranian counterpart HassanRouhani. "During the visit of our president [Park], agreement letters worth$20 billion will be signed with Iran," South Korea's Kang was quoted as sayingby Shana after meeting with Zanganeh.

Kogas also signed a separate cooperation accord with the NationalIranian Gas Company. "We are ready to have a good cooperation with Iraniancompanies in different fields including LNG, installation of national gasgrids and transfer of technology," Kogas' Seung-Hoon Lee was quoted as sayingafter signing the agreement.

The South Korean delegation includes 230 companies from differentsectors.

Before the sanctions were imposed, Tehran-Seoul bilateral exchangesamounted to $17 billion. The trade volume was cut significantly by thesanctions, and the two sides are now seeking to revive the ties.

--Aresu Eqbali, newsdesk@platts.com--Edited by Wendy Wells, wendy.wells@platts.com