Kogas to increase LNG imports

Korea Gas Corp (Kogas) is tipped to sign deals for additional LNG supplies under mid-term deals, which could tie up several existing LNG vessels tightening vessel supply, Maritimepress reported Friday.

Kogas had signed its first-ever term deal for LNG with Australia's North West Shelf. The importer is expected to buy 500,000-tonnes per annum over a seven-year period.

Kogas is also reported to be in talks with Malaysian oil and gas giant Petronas over a seven-year deal to supply up to 1.5 million tonnes on an annual basis.

Shell's newbuildings the 2001-built, 135,000-cbm Galea and Gallina could be possible candidates for the NWS shipments.

The oil major is a partner in the NWS and newly delivered Gallina has been earmarked to lift wedge volumes from the project. Kogas fixed Galea ex-yard on a six-month charter in October at a head-turning rate of around $150,000 per day.

Malaysia could also be well placed to provide shipping for Kogas. Malaysia International Shipping Co is in the process of taking delivery of a series of newbuildings from Japan, and could have spare capacity in these or its existing ships 1980s-built ships whose 20-year charters come up for renewal this year.

Kogas' winter gas shortfall is a regular annual occurrence. But this year the Korean importer has been struggling more than usual over the last few months, after demand has surged in the cold winter, and Japan has mopped up surplus cargoes in the wake of its enforced move away from nuclear power.

The shortage of gas has forced Kogas to turn to new markets, even buying spot cargoes from as far away as Algeria. The company is taking three cargoes ex-ship between January to March. The product is expected to be shipped onboard MISC's 130,000-cbm LNG carrier Tenaga Satu (built 1982), which is chartered in to Sonatrach marketing partner Gaz de France.

Reports calculate that Kogas has bought around two million tonnes of LNG in spot cargoes this winter, and is seeking more.

Kogas currently imports around 16.9 million tonnes of LNG per year under 15-year plus supply deals with producers in Indonesia, Malaysia, Oman, Brunei, and Qatar.

Korean LNG demand is expected to surge to 20 million tonnes a year in 2005.(*)