Regional LNG: KOGAS to invest $236m to expand LNG facilities

Korea Gas Corp. (KOGAS), the world's single-largest buyer of liquefied natural gas (LNG), said it will spend 246.3 billion won (US$236.3 million) over the next five years on gas storage and pipelines, Reuters reported.

State-controlled KOGAS will invest 197.1 billion won by June 2009 to build two LNG storage facilities and gasification equipment, the company said in a filing to the Korea Stock Exchange on Monday. The rest would be used to build new pipelines by 2007.

The new storage facilities, to be built in Tongyong, in the south of the country, would have a combined capacity of 280,000 kilolitres, equivalent to 7 percent of KOGAS' current total capacity of 4.18 million kilolitres, it said.

"The expansion is in line with our efforts to meet increasing demand for natural gas and to better cope with the strong seasonality of demand for the fuel," the company said.

The gas monopoly has been in talks with five bidders for long-term LNG contracts for annual supplies of a combined 5.3 million tons from 2007.

The firm imports 19.4 million tons of LNG every year under term supply contracts with Indonesia, Malaysia, Oman, Brunei, Qatar and Australia and meets extra needs from the spot market.

Natural gas demand in South Korea, which imports almost all of its natural gas needs, is expected to stand between 20 million and 21 million tons this year. (*)