Russia Writes Off North Korea Debt to Facilitate Gas Pipeline to South Korea

In order to facilitate construction of gas pipeline to South Korea, Russia has agreed to write off almost $10 billion of North Korea's Soviet-era debt, reports news agency Reuters.

On Friday, the State Duma lower house ratified a 2012 agreement to write off the bulk of North Korea's debt, which stood at $10.96 billion as of Sept. 17, 2012.

As per Reuters report the rest of the debt, $1.09 billion, would be redeemed during the next 20 years, to be paid in equal installments every six months.

Gazprom has been planning to build a gas pipeline to South Korea via North Korea which would carry 10 billion cubic metres of gas per year.

Russia has been trying to diversify its energy sales to Asia away from Europe, says Reuters. Moscow aims to reach a deal to supply gas to China, after a decade of talks, this May.