North West Shelf to supply LNG to South Korea
Thursday, January 16 2003 - 02:47 AM WIB
KOGAS said it planned to initial a seven-year deal on Friday with the Australian venture operated by Woodside Petroleum.
"We are to exchange letters of intent for the mid-term LNG supply deal with North West Shelf on Friday for the supply of 500,000 tonnes a year" over seven years, a KOGAS official in Seoul told Reuters.
KOGAS president Kim Myung-kyu is in Australia for the deal.
South Korea is the world's second largest LNG importer after Japan. Previously KOGAS has only bought spot LNG cargoes from North West Shelf.
Woodside confirmed North West Shelf was in talks with KOGAS, but a spokesman refused to say whether a deal was imminent.
KOGAS has been seeking an extra two million tonnes of term LNG to meet growing demand in South Korea which partly stems from power firms using more LNG than alternative fuel oil.
The company already has long-term supply contracts for a total of 16.9 million tonnes of LNG a year with Indonesia, Malaysia, Oman, Brunei and Qatar, but demand is forecast at 18.3 million tonnes this year.
The KOGAS official said the company had been in talks with other suppliers for the remaining 1.5 million tonnes of extra LNG needs, but he declined to elaborate.
South Korean LNG demand is expected to reach about 20 million tonnes in 2005, according to official data.
The North West Shelf has supplied KOGAS with around six spot cargoes of LNG since 1989 and the joint venture has always made it clear that it would like a term supply contract.(*)