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Koreans target reduced LNG stakes
Korea Gas Corp., Kogas, is seeking a buyer for 5 percent-10 percent of the Shell-operated LNG Canada project, in which it holds a 20 percent stake.
Jang Seok-Hyo, chief executive officer of the state-owned company, which is the world’s largest corporate LNG importer, said the company also wants to take all of the cargoes from the U.S. Sabine Pass LNG project to South Korea to help stabilize Korean gas prices.
He told reporters at the World Energy Conference in Daegu, South Korea, that Kogas is making a concerted effort to improve its financial position after accumulating huge debt over the past five years to acquire offshore assets to improve South Korea’s energy security.
South Korean buyer preferred However, he said Kogas would prefer to sell its LNG Canada assets to a South Korean buyer to keep that country’s stakes unchanged. The company hopes to have a deal in place by early 2014.
Shell has 40 percent of LNG Canada, with Kogas, PetroChina and Japan’s Mitsubishi holding 20 percent each of a project that is targeting eventual LNG shipments of 12 million metric tons a year, starting in 2019. Jang also confirmed that Kogas is ready to sell all or part of its 15 percent share of Australia’s US$18.5 billion Gladstone LNG project, trimming its plan to import 3.5 million metric tons a year over 20 years from Gladstone.
Kogas and France’s Total plan to jointly buy 3.5 million metric tons a year of Sabine LNG starting in 2017.
Jang said Kogas is unsure about moving away from oil-indexed prices for the LNG it imports in exchange for Henry Hub gas process which have a history of volatility, especially in the early 2000s.
—Gary Park
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