By Shinhye Kang
Dec. 11 (Bloomberg) -- Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, is seeking stakes in fields in Australia, Oman, Papua New Guinea and Nigeria to secure stable supplies of the fuel, Chief Executive Choo Kang Soo said.
“We have been contacting the owners of overseas fields including Exxon Mobil Corp. and Total SA,” Choo said in an interview at an oil conference in Seoul. Exxon is planning an LNG project in Papua New Guinea while Total has a stake in a Nigerian venture.
South Korea, which imports almost all its energy needs, wants to diversify sources of oil and gas as it competes with China, Japan and India for natural resources. In September, Korea Gas signed a 30-year accord with OAO Gazprom to import annually 10 billion cubic meters of gas, equivalent to almost a quarter of the country’s yearly needs, starting in 2015.
Korea Gas may buy the fuel from Gazprom, Russia’s biggest natural-gas producer, as early as 2012, sooner than the company originally expected, Choo said yesterday at the conference. The fuel may be delivered in the form of compressed natural gas or via a floating LNG vessel, should supplies begin in 2012.
The companies have proposed an overland pipeline through North Korea as a more economical option for delivering the gas. “Gazprom formally suggested the idea to North Korea and we’re waiting a response from the North,” Choo said.
Undersea Pipeline
An undersea pipeline to import the fuel from Russia may be built if the North Korea plan falls through, Choo said on Nov. 26.
While North and South Korea share a border, they lack standard diplomatic channels because their 1950-1953 war ended without a peace agreement. Around 1.7 million troops face each other across a demilitarized zone.
Korea Gas bought a 1.2 percent stake in Oman Liquefied Natural Gas Co. in 1997 and a 3 percent stake in Qatar Ras Gas in 1999, with investments reaching 2 billion won ($1.5 million) and 19 billion won, respectively, according to the Web site of the Seongnam, South Korea-based company.
The utility also purchased an 8.9 percent stake in Yemen LNG Co. in 2005. The Yemen project is expected to produce 6.7 million metric tons of LNG a year from 2009 for 25 years.
Korea Gas expects sales of natural gas to reach 27.5 million tons this year, according to the company’s Web site. Choo said sales may increase in volume terms next year even after recent declines because of slower economic growth.
Hyundai Motor
Domestic sales fell for a second month in November as factories cut electricity consumption and reduced output. Last month, Hyundai Motor Co., South Korea’s biggest automaker, lowered production of sport-utility vehicles and small trucks while Yeochun NCC Co., the nation’s largest ethylene producer, shut its smallest plant.
Korea Gas needs a 27.7 percent increase in gas tariffs next year to cover increased fuel costs, Choo said. “But the decision is up to the government.”
South Korea raised gas prices on Nov. 15 for the first time this year, by 7.3 percent, because of a higher fuel bill. Slowing economic growth and rising inflation had forced South Korea to hold back on boosting the cost of gas for consumers at the expense of state-controlled Korea Gas.
Korea Gas has fallen 16 percent in Seoul trading this year and closed at 54,400 won yesterday. The utility posted a loss of 5.3 billion won ($4.2 million) in the quarter ended Sept. 30.
South Korea’s gas consumption more than doubled to 37 billion cubic meters last year compared with 1997, according to the BP Statistical Review.
LNG is gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by ship to destinations not connected by pipeline. On arrival, it’s turned back into gas for distribution to power plants and other buyers.
To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.
Posts
No comments:
Post a Comment