Regional LNG: KOGAS shortlists bidders to join LNG carrier consortium: Report

Korea Gas Corp. (KOGAS), the world's single-largest LNG buyer, has picked three preferred bidders to join an LNG carrier consortium, officials from the bidders said on Friday.

KOGAS is setting up the consortium as part of efforts to cut transport costs. The LNG carrier group, in which KOGAS will hold a 28 percent stake, will start shipping LNG from Russia's Sakhalin and Yemen to South Korea from 2008.

Globally, more buyers of LNG, a natural gas that is chilled and compressed for transport by tanker, are securing LNG shipping fleets in order to be more flexible over delivery in a market traditionally dominated by producers.

The state-controlled gas monopoly had selected STX Pan Ocean, Hyundai Merchant Marine Co. and Korea Line Corp. as preferred bidders, officials from Hyundai Merchant and STX Pan Ocean said. The officials asked not to be named.

Hanjin Shipping and SK Shipping were not picked, they added.

KOGAS officials were not available for comment.

"We were included in the list of top bidders, and it is widely expected the three bidders will also become final winners," said the Hyundai official.

KOGAS has said it would announce partners for the consortium on Monday.

Once the partners were selected, the group would place orders for four LNG carriers worth about $800 million.

If picked, Korea Line would order two LNG carriers from Daewoo Shipbuilding and Marine Engineering, the Hyundai official said.

STX and Hyundai Merchant would ask Hanjin Heavy Industries Co. and Hyundai Heavy Industries Co. to build one tanker for each one, respectively, he added. (*)