BP takes 35% interest in power station

Larry Persily

Petroleum News Juneau Correspondent

BP, already selected to supply liquefied natural gas to SK Power’s electrical generating plant under construction in South Korea, announced Dec. 23 it will take a 35 percent ownership stake in the project.

SK Corp., a South Korean oil refiner, had held 100 percent ownership of SK Power, but will drop its share to 65 percent.

SK Power is building the 1,074-megawatt, gas-fired power station at the Port of Gwangyang, about 200 miles south of Seoul on South Korea’s southern coast. The power station is estimated to cost $600 million, with start-up scheduled for 2006, BP said. The power plant will consume almost 90 million cubic feet of natural gas a day, which will be imported from BP’s Tangguh LNG project in Indonesia.

The power plant will be next door to another consumer of Tangguh gas, a new LNG receiving terminal being developed by POSCO, the world’s second largest steelmaker. POSCO, a South Korean company, will take its own 90 million cubic feet per day of Tangguh LNG.

Tangguh, with more than 14 trillion cubic feet of proven reserves, also will supply Sempra Energy’s proposed LNG receiving terminal on Mexico’s Baja Peninsula and a terminal in China. The combined flow of the three projects in Mexico, China and South Korea will total almost 1.1 billion cubic feet per day.