Regional LNG: Petronas seals $3.2b LNG deal with Kogas
Friday, May 9 2003 - 11:11 PM WIB
Both companies signed a sale and purchase agreement (SPA) in Kuala Lumpur yesterday for the supply of the LNG for seven years to the South Korean LNG importer.
Petronas said in a statement that the LNG will be delivered to Kogas effective this month from MLNG Tiga?s plant, which is Malaysia?s third LNG production facilitiy at the Petronas LNG complex in Bintulu, Sarawak.
The LNG will be shipped by tankers owned by Malaysia International Shipping Corp Bhd (MISC), another subsidiary of Petronas, to Kogas? receiving terminals in Incheon, Pyeong Taek and Tong Young in South Korea.
Kogas, whose current customers include Korea Electric Power Corp and city gas companies, is already importing up to two million tonnes of LNG annually from Malaysia, supplied under a 20-year contract with Malaysia LNG. The LNG for this contract is sourced from Malaysia LNG Dua Sdn Bhd?s (MLNG Dua) plant.
An industry observer expects the deal to strengthen Petronas? position as a global player in the LNG business.
Indonesia for US$164 million.
The observer said the Kogas deal is also a booster for Petronas which is bidding for the supply of LNG worth US$4.9 billion to Pohang Steel Co (Posco) and SK Corp of South Korea.
?The deal is timely when Petronas? rival BP Plc?s Indonesia LNG Project is said to be lobbying for the contract, offering lower price of LNG to the South Korean companies,? the observer said.
Petronas and BP Plc?s Indonesia LNG Project have been shortlisted for the LNG supply contract to Posco and SK Corp. The decision will be announced in July.
In a news report on Thursday, Indonesia?s head of the marketing division I of the Upstream Oil and Gas Implementing Agency Djoko Harsono said the Indonesian Government is confident that BP Plc?s Indonesia LNG Project can win the bid as its offering price is lower than Petronas.
On the SPA signed with Kogas, Petronas said it is the fifth supply contract concluded by MLNG Tiga.
With this contract, MLNG Tiga has now committed about six million tonnes of LNG annually to buyers from Souh Korea, Japan and Taiwan.
?The company is currently in the midst of discussions and negotiations with other potential buyers for the remaining output of the plant,? Petronas said.
At the SPA signing, MLNG Tiga was represented by chairman Tan Sri Mohd Hassan Marican, who is also Petronas president and chief executive officer (CEO), while Kogas was represented by its chairman, president and CEO Dr Kim Myung-Kyu.
MLNG Tiga is a joint venture between Petronas (60 per cent), Shell Gas Holdings Malaysia Ltd (15 per cent), the Sarawak State Government (10 per cent), Nippon Oil Ltd (10 per cent) and Diamond Gas Netherlands BV (5 per cent).
The MLNG Tiga plant comprises two liquefication trains with an annual production capacity of 3.4 million tonnes each.
The first train came on stream in March, while the second train is scheduled to begin commercial operations by October.
The Petronas LNG complex in Bintulu, which was officially opened by Prime Minister Mahathir Mohamad, is set to become by October the world?s largest integrated LNG facility at a single location with a combined production capacity of about 23 million tonnes per year.
Apart from the two-train 6.8 million tonnes per annum (mtpa) MLNG Tiga plant, the complex also houses the three-train, 8.1 mtpa Malaysia LNG plant as well as three-train, 7.8 mtpa MLNG Dua plant.(*)