LNG

The largest South Korean power and natural gas companies with liquefied natural gas commitments including imports and purchases have seen their current debts staying at high levels because of last year’s higher commodity prices and increasing interest rates.

Woodside Energy, the leading supplier of Australian LNG cargoes to North Asia, has signed a sale and purchase agreement with the South Korean state-owned utility Korea Gas Corp. as more Asian nations seek to secure long-term supplies for energy security.

The SPA provides for the supply of around 500,000 tonnes per annum of LNG for a period of 10.5 years on a delivered basis whereby Woodside supplies the shipping.

The supply deals with the Koreans begin in 2026 and will come from Woodside’s portfolio.

“LNG delivered to Kogas under the SPA will be sourced from uncommitted volumes across Woodside’s global portfolio, including the Scarborough Energy Project which is targeting first LNG cargo in 2026,” explained Woodside.

Kogas already receives Australian LNG cargoes from other regional projects such as Gladstone LNG in Queensland.

Queensland LNG

The GLNG plant is operated by Adelaide-based Santos and Kogas is a shareholder along with French major TotalEnergies and Malaysia’s Petronas.

The state-owned Korean utility has been a long-term regional importer from nations like Indonesia and Malaysia as well as Qatar and Oman in the Middle East.

Woodside Chief Executive Meg O’Neill said that the SPA was significant as Woodside’s first long-term supply agreement into Korea, the world’s third-largest LNG market.

She said the agreement reinforced the ongoing contribution of Woodside’s LNG towards the energy security needs of major customers in the region.

“Woodside is pleased to be a long-term supplier of LNG to Kogas, a leading global energy company and one of the world’s largest LNG importers,” said O’Neill.

“This agreement is further demonstration of ongoing robust demand for Woodside’s products from major energy customers in our region,” O’Neill stated.

LNG for power

Kogas President and CEO Choi Yeon-Hye said she was pleased to conclude the SPA with Woodside.

“This SPA has enabled Kogas to enlarge the customer base in the domestic power market, reinforcing our role as a leading natural gas supplier in Korea,” she stated.

“By leveraging this SPA, we look forward to further expanding our business opportunities with Woodside in the LNG industry,” added Choi.

Kogas controls or jointly controls five out of South Korea’s seven import terminals at Incheon, Pyeongtaek, Samcheok, Tong-Yeong and Jeju.

The other two terminals are at Gwangyang and Boryeong and are used respectively by steelmaker POSCO and other utilities.

The South Korean government said that liquefied natural gas imports have remained steady and measures were being taken to boost storage for the winter because of continued global geopolitical uncertainties.

JERA Co. Inc., the largest Japanese liquefied natural gas buyer, and Korea Gas Corp. (Kogas), its counterpart in South Korea, have signed an accord to cooperate in the LNG business.

Korea Electric Power Corp., the state-run utility, said it planned to import more coal this winter because of the price differential between coal and liquefied national gas shipments in terms of generation compared with cost where there was a 40 percent saving.

Oct 9 (LNGJ) - Petronas, the Malaysian state-backed energy company and LNG supplier, said it signed a Sale and Purchase Agreement (SPA) with Korea Midland Power, the South Korean electricity generating company. The accord is for 240,000 tonnes per annum of LNG for an initial term of five years.

   Korea Midland is based in Boryeong, the port on the Yellow Sea coast where the nation’s newest of its six LNG import terminals is located. Boryeong has been in operation since 2017 and is owned by independent energy utilities rather than state-run Korea Gas Corp.