Posco receives 1st LNG shipment from BP: Report

South Korean steelmaker Posco on Friday received 60,000 metric tons of LNG in its first shipment that's part of a US$2 billion contract with BP Plc, Bloomberg reported.

"A LNG tanker carrying the first cargo from BP arrived at the Gwangyang terminal this morning," Kim Soo Jung, an assistant manager at Posco's corporate communications team, said. The fuel came from Oman.

Posco agreed in July to buy 550,000 tons of LNG a year for 20 years from BP's Tangguh LNG venture in Indonesia.

BP will supply the LNG from its other plants in Asia, including in Oman until Tangguh begins production in 2008.

"The first shipment is mainly for a test-run of our LNG receiving terminal, which is expected to begin full operation next month," Kim said.

Posco is building a 1.7 million ton-a-year LNG-receiving terminal in Gwangyang, south of Seoul. The company plans to spend 280 billion won ($279 million) over three years to expand its capacity by 3 million tons a year.

BP is also in contract to sell 600,000 tons per year of Tangguh LNG to K-Power Co., a unit of SK Corp., Korea's largest oil refiner starting 2006.(*)