Regional LNG: BP signs preliminary deal to invest in SK Corp

BP Plc, the world's third-largest oil company, has signed a preliminary agreement to buy more than 10 percent of a power generation unit of SK Corp, South Korea's top oil refiner said on Saturday as reported by Reuters.

The British oil major would be issued new shares in the SK Power Co Ltd, which is currently wholly owned by SK Corp, Korea's largest refiner said in a statement.

SK Corp declined to disclose how much the British company would invest in the unit.

A senior spokesman for the oil refiner told Reuters BP might acquire up to 30 percent in the unlisted power unit, with the deal to be finalised soon.

The announcement came two months after two firms signed a memorandum of understanding for BP to supply SK Corp with 600,000 tons of liquefied natural gas (LNG) a year for 20 years, starting in 2006.

SK Corp, which controls nearly 40 percent of the country's oil market, has sought to sell a stake in the power generation unit and raise foreign capital after it pledged a troubled oil trading affiliate 850 billion won ($722 million) in a debt-for-equity swap.

In the third quarter, the oil refiner reported a 90-percent plunge in net profit after putting money aside to help the affiliate, SK Networks. (US$1=1,178 won). (*)