North Korea has agreed to allow a feasibility study into laying a pipeline bringing gas through its territory from Russia to the South.
South Korean officials announced the agreement on Monday in the latest of a string of measures indicating a thawing of relations between the two states.
Should it be built, the 4,115 km (2,570 mile) pipeline would supply gas not only to both Koreas, but also to China.
It stems from a joint project between Russia, China and South Korea to develop gas fields in Irkutsk, central Siberia, which are thought to contain reserves of as much as 840m tonnes of natural gas.
South Korea wants to import about 7m tonnes a year from the field over 30 years, with supply intended to start in 2008.
If the trans-Korea pipeline remains on the drawing board, the alternative would be to build an undersea pipeline.
Representatives from the two countries met last week in the northern capital Pyongyang to thrash out the deal.
That session formed part of a broader rapprochement as ministers on either side agreed to resume regular meetings.
On the agenda for discussion in the immediate future is the question of tourist links, including the reopening of a cross-border rail link.
Regular contact had been the rule until March this year, when the Bush administration in the US decided to review its dealings with North Korea.
Pyongyang immediately froze its ties with the South in retaliation.
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