Reuters are reporting that Korea Gas Corp (KOGAS) will seek flexible contracts to have more leeway to trade its LNG cargoes further down the line.
The changes would follow similar efforts by LNG buyers in Japan. Companies there have been vocal about the removal of destination clauses in their long-term import contract that restrict a buyer's ability to resell cargoes it does not need.
But KOGAS will have to wait until 2025, when its long-term contracts expire, before it can start to adjust its import terms.
Of KOGAS's long-term contracts, a 4.92 million tpy supply deal with Qatar will expire in 2024 and another 4.06 million tpy deal with Oman will end in 2024. The company imports about 30 million tpy.
KOGAS is willing to bring more natural gas from the US amid increasing US shale gas output.
The company signed up in 2012 for 2.8 million tpy of US LNG with Texas-based Cheniere, under a 20-year supply deal starting this year. The first US LNG cargoes are set to arrive in South Korea this summer.
While KOGAS is looking for flexible contracts and overseas projects, at home, it is preparing for the country's gas market liberalisation in 2025. The liberalisation will allow private LNG importers in South Korea to sell gas to utilities and other end-users, increasing competition for KOGAS, who is currently the country's sole LNG wholesaler.
Read the article online at: https://www.lngindustry.com/liquefaction/13032017/kogas-to-seek-more-flexible-lng-contracts/