POSCO eyeing term LNG contracts beginning 2005: Report

South Korea's POSCO Co., the world's second-largest steelmaker, said on Thursday it was seeking term supply contracts of liquefied natural gas (LNG), starting in 2005.

POSCO has not yet decided how much term LNG it needed and who might supply the gas, which will pass through a new terminal opening in 2005, Lee Sang-choon, a POSCO spokesman, told Reuters.

The new terminal means POSCO will no longer depend on LNG supplies from state-run Korea Gas Corp (KOGAS).

"We are going to make term LNG deals, probably starting as early as 2005, for our own LNG-fired plants," Lee said.

POSCO has two LNG-fired power plants located in the southern ports of Kwangyang and Pohang, with a combined capacity standing at 845 megawatts (MW), he added.

POSCO currently purchases about 400,000 to 500,000 tonnes of LNG a year from KOGAS, the country's sole importer and wholesaler of LNG, Lee said.

KOGAS imports 16.9 million tonnes of LNG a year under long-term supply contracts with Indonesia, Malaysia, Brunei, Qatar and Oman. KOGAS is also seeking fresh term LNG contracts as domestic demand is expected to surpass supply from next year.

South Korea, which imports all of its crude oil and natural gas requirements, is one of the world's major LNG importers.(*)