Seoul said Monday it would consider all possible risks as it prepares for more talks on a huge project to pipe Russian natural gas to South Korea via North Korea.
"We will examine all possible measures to tackle North Korean risks and reflect them in the process of further discussions," the Ministry of Knowledge Economy said in a report to parliament.
Inter-Korean relations remain frosty after two deadly border incidents last year which Seoul blamed on its neighbour. Critics of the pipeline project say Pyongyang could tamper with the gas supply at times of tensions.
Responding to such criticism, the ministry report quoted by Yonhap news agency said the exporter (Russia) in such deals bears responsibility for the fulfillment of obligations.
But it noted that the project "is still in its infancy and there has been no discussion yet on detailed terms of a contract".
The pipeline, estimated by the ministry to cost $3.4 billion, has been mooted for years. It was back in the headlines last month when the North's leader Kim Jong-Il reportedly gave it his backing during a summit in Russia with President Dmitry Medvedev.
Choo Kang-Soo, president of South Korea's state-run Korea Gas Corp, and North Korea's Oil Industry Minister Kim Hui-Yong held separate talks in Russia last week with representatives of Russia's largest gas firm Gazprom.
Gazprom said discussions with Kim ended with the signing of a memorandum of understanding while those with Choo produced a "roadmap" for future gas deliveries to the South.
South Korea's President Lee Myung-Bak said this month the pipeline may be speeded up. "I think it will proceed faster than expected. It will be great if the project materialises," he said.
Resource-poor but heavily industrialised South Korea is one of the world's biggest importers of natural gas.
Under a 2008 interim agreement with Gazprom it would import at least 10 billion cubic metres (350 billion cubic feet) of natural gas a year -- 20 percent of its annual needs -- for 30 years.
Apart from the North Korean delivery route, other options are an undersea pipeline or liquefied supplies by ship.
Experts said the transport cost of pipelined gas would be one third that of liquefied gas carried by ship. Given current gas prices, the deal could bring Russia $150 billion over 30 years.
Citing government sources, South Korea's Chosun Ilbo newspaper has said the impoverished North was asking $150 million per year as a transit fee.