SOUTH Korea announced long-term agreements yesterday worth $84bn (£50.8bn) with Royal Dutch Shell and Total to buy gas from liquefied natural gas projects in Australia.
Asia’s largest economies are competing for Australia’s rapidly growing supplies of LNG to secure the energy to fuel expansion.
South Korea, the world’s second-largest buyer of LNG after Japan, needs the deals to replace supply from Indonesia, Malaysia and Brunei under agreements due to expire between 2013 and 2015.
State-run Korea Gas (KOGAS) will import a combined 5.64m tonnes per annum (mtpa) of LNG from 2013 to 2035 under the agreements, the economy ministry said in a statement.
The volume is equivalent to about a fifth of the country’ s LNG imports in 2010, and the deals are due to be signed next month. Worth 90 trillion won over their lifetime,the deals are the nation’s largest ever long-term gas supply agreements.
KOGAS, the world’s largest corporate buyer of LNG, will also acquire a 10 per cent stake with an additional investment of $1.5bn in Shell’s fully-owned Prelude project in Australia, the ministry said.
Analysts had expected KOGAS to buy LNG from Prelude as Samsung Heavy Industries is building the giant vessel in South Korea to process and liquefy gas from the project.