S. Korea to import term LNG from Malaysia from April: Report

South Korea, the world's second-largest importer of liquefied natural gas, will sign a preliminary pact in March to import 1.5 million tons of term LNG from Malaysia, a source close to the deal was quoted by Reuters as saying on Wednesday.

State-run Korea Gas Corp (KOGAS) , Seoul's only LNG importer and wholesaler, expects to sign the pact with MLNG, an affiliate of Malaysian state oil firm Petronas, to import 1.5 million tons of LNG a year under a seven-year term contract starting from April 1, the source told Reuters.

"KOGAS plans to make an initial contract with MLNG in March, but they are not there for a final contract yet," he said.

A Petronas official confirmed in January the firm had been in talks with KOGAS over the term deal.

In January, KOGAS made a preliminary term deal with the North West Shelf, operated by Woodside Petroleum, for an annual LNG supply of 500,000 tons over seven years from the second half of this year.

If finalised, the two contracts could raise South Korea's annual LNG imports to almost 19 million tons, helping to ease projected excessive demand over supply in the next years.

Seoul is still in need of more fresh term contracts as local demand is expected to reach 20 million tons by 2005, 22 million by 2010 and 28 million by 2015, the energy ministry has forecast.

KOGAS imports 16.9 million tons of LNG every year under long-term contracts with Indonesia, Malaysia, Oman, Brunei and Qatar. (*)