Press Release: SK Corp.: K-Power signs LNG deal with Tangguh
Tuesday, August 31 2004 - 05:04 AM WIB
The signing ceremony was joined by Ambassador Hai-Jung Yun, Korean Ambassador to Indonesia. Attendees from the buyer's side included President and CEO Heon-Cheol Shin of SK Corporation, which is a major shareholder of K-Power, Senior Vice President Jeong-Joon Yu of SK Corporation's R&I Division, and Representative Director Young-Duk Park of K-Power. From the sellers' side, Minister of Energy and Mineral Resources Purnomo Yoesgiantoro, Chairman Rachmat Sudibjo of BPMigas, the government body in charge of marketing Indonesia's oil and gas, President Doug Rottenberg of BP Global LNG and President Bill Schrader of BP Indonesia attended.
K-Power chose the Tangguh project as the supplier of the fuel for its 1,074 megawatt gas-fired power plant in Kwangyang which is scheduled to start its commercial operation in 2006. The Heads of Agreement was signed between K-Power and the consortium last year. Under the agreement, K-Power will be supplied with 600,000 tons on annual average for twenty years from 2006. K-Power also has the right to buy an extra 200,000 tons of LNG each year until 2010, so it will be able to respond flexibly to changes in demand, and thereby contribute to the stabilization of demand for LNG in the Korean market.
The price offered to K-Power, along with the agreement signed between the Tangguh LNG consortium and POSCO, is considered as one of the lowest in the Asia-Pacific region. K-Power will share an LNG terminal, which POSCO is building in Kwangyang (scheduled for completion in July 2005) to receive LNG from the Tangguh LNG project. The first cargo used for the commissioning of the power plant will arrive in the second half of 2005. K-Power is a joint venture between SK Corporation and BP; SK Corporation has a 65% interest in K-Power and BP, 35%.(end of release)