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South Korea's KOGAS signs 15-year contract with BP to import U.S. LNG

South Korea's KOGAS signs 15-year contract with BP to import U.S. LNG
FILE PHOTO: The logo of KOGAS (Korea Gas Corporation) is pictured at the 26th World Gas Conference in Paris, France, June 2, 2015. REUTERS/Benoit Tessier/File Photo -
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Benoit Tessier(Reuters)
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SEOUL (Reuters) – South Korea’s state-run Korea Gas Corp (KOGAS) <036460.KS> signed an agreement with BP <BP.L> to buy 1.58 million tonnes of U.S. liquefied natural gas (LNG) for 15 years starting 2025, its energy ministry said on Tuesday.

The LNG will be delivered from Freeport LNG terminal or Calcasieu Pass. The deal could be expendable for three years at a seller’s option and is estimated to be worth up to $9.61 billion for 18 years, the ministry said.

South Korea, the world’s third largest LNG importer, imports most of its super chilled fuel through the country’s sole LNG wholesaler KOGAS, which typically ships in between 35 and 40 million tonnes a year, mainly from Qatar and Australia.

The United States is South Korea’s third largest LNG supplier, while South Korea is the top importer of U.S. LNG.

In the first eight months of the year, South Korea imported 4.82 million tonnes of LNG from the United States, up 5.5% from 4.57 million tonnes during the same period a year earlier, according to customs data. Imports from the United States made up 18% of the country’s total LNG imports.

The ministry said the deal would strengthen bilateral energy cooperation and help South Korea diversify its LNG import sources.

KOGAS currently brings in 2.8 million tonnes a year of U.S. LNG processed by Cheniere <LNG.A> under a 20-year supply deal starting 2017.

(Reporting By Jane Chung; Editing by Chris Reese and Arun Koyyur)

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