S. Korea?s companies to tender for long-term LNG: Report

South Korea's steel giant POSCO Co and top oil refiner SK Corp said on Tuesday they would jointly tender next week for long-term LNG (liquefied natural gas) contracts for a combined 1.1 million tons a year.

The deals would make the two firms the first private companies to import LNG in South Korea, the world's second-largest LNG importer after Japan.

"We plan to issue the tender together with SK Corp on February 13, which is subject to change, for supplies of about 1.1 million tons of LNG a year over 20 years," Kim Jin-won, a POSCO spokesman, told Reuters.

An SK Corp spokesman confirmed the company's plan for the joint tender.

The tender, which would close some time in March, would be open to 10 companies in countries including Australia, Malaysia, Indonesia, Oman, Qatar and Russia, Kim said.

He added that POSCO, the world's second-largest steel maker, would look for 500,000 tons while SK Corp would seek between 350,000 tons and 600,000 tons.

POSCO has said it would seek the long-term LNG contract to power its plants from 2005.

Seoul brought in a law in 1997 to allow private firms to import LNG on condition that those firms used the LNG at their own power plants.

POSCO has two LNG-fired power plants in the southern ports of Kwangyang and Pohang, with a combined capacity standing at 845 megawatts (MW). SK Corp plans to build a 900-MW thermal power plant in Kwangyang by 2006.

POSCO and SK Corp are among four bidders lined up to buy one power generation unit of state-run Korea Electric Power Corp (KEPCO), being privatised under broader public reform plans.

Currently, state-run Korea Gas Corp (KOGAS) is the country's sole LNG importer and wholesaler, importing 16.9 million tonnes of LNG annually under long-term supply contracts with Indonesia, Malaysia, Oman, Brunei and Qatar.

KOGAS is also in talks with several LNG suppliers for fresh term contracts as domestic demand is forecast to exceed supply by 1.2 million tons in 2003. (*)