Regional LNG: Sakhalin Energy settles LNG sales deal with Kogas

Oil major Royal Dutch/Shell said on Friday its Russian LNG venture, Sakhalin Energy, had finalised a gas sales deal with Korean Kogas Corp, Reuters reported.

Under the 20-year deal, which was preliminary agreed earlier this year, Shell will supply 1.5 million tons per year of LNG from its Sakhalin plant in Russia to Kogas, the world?s largest LNG buyer.

Friday?s statement came a day after Shell doubled its costs estimates for Sakhalin, which is set to become the world's largest LNG plant, to $20 billion and postponed the first shipments by around 6 months to mid-2008.

The Sakhalin group, which also includes Japan?s Mitsui and Mitsubishi, had earlier expected to deliver the first cargo to Kogas in January 2008.

Sakhalin Energy did not say on Friday whether it had already agreed a new shipments schedule with Kogas.

The group has already sold more than 80 percent of its projected output of 9.6 million tons of LNG per year under long-term deals with Korean, Japanese and U.S. firms and says it might want to expand the project if there is more demand. (*)