Regional LNG: SK Corp sells part of stake in power plant unit to BP

South Korea top oil refiner SK Corp announced on Tuesday it had signed a contract to sell a 35 percent stake in its power unit to BP Plc as part of a plan to jointly build a US$600 million power plant in Korea.

Under the contract, the BP will participate in a project to build a 1,074-megawatt (MW) gas-fired power plant in the city of Kwangyang, in the southern province of Cholla, the company said in a statement.

SK Corp plans to finance 60 percent of the $600 million plant via project financing and the remaining cost would be recovered through direct investment by the refiner and BP in a 65:35 ratio.

BP would be issued new shares worth about $84 million and SK Corp's stake in unlisted SK Power Co Ltd would fall to 65 percent.

The deal came after SK Power and a consortium led by BP signed a memorandum of understanding in August to import 600,000 tonnes of liquefied natural gas (LNG) annually for 20 years from Tangguh LNG plant operated by BP, starting in 2006.

SK Corp plans to begin construction on the plant some time in 2004 and aims to complete it by 2006.(*)