South Korea’s state-run Korea Gas Corp. signed a long-term agreement with British energy company BP to buy US liquefied natural gas, the first LNG deal between the two countries under the Donald Trump administration, officials said on Tuesday.
(From left) BP’s global head of gas & power Robert Lawson, Minister of Trade, Industry and Energy Sung Yun-mo and Korea Gas Corp. CEO Chae Hee-bong attend a signing ceremony in Washington, Monday. (MOTIE)
On Monday, Korea Gas Corp. signed a 15-year contract with BP in Washington to purchase 1.58 million tons of US liquefied natural gas on a yearly basis starting from 2025. The seller, BP, can extend the term for three years if desired.
The signing ceremony was attended by Minister of Trade, Industry and Energy Sung Yun-mo, Korea Gas Corp. CEO Chae Hee-bong and BP’s global head of gas & power Robert Lawson.
Under the 15-year contract, US LNG will be delivered from Freeport LNG terminal or Calcasieu Pass. The purchase price is estimated to be up to $9.6 billion for a total of 18 years of contracts, including the optional period, according to the ministry.
The ministry said the volume of energy trade between South Korea and the US increased more than seven times from $1.3 billion in 2016 to $9.4 billion in 2018.
Korea has also become the largest importer of US LNG in 2018 followed by Mexico and Japan. Last year, Korea imported 4.6 million tons of US LNG, which accounted for 10 percent of total LNG imports.
“Through this long-term contract, the imports are expected to surge to 7.9 million tons by 2025 with an increased portion of 22.8 percent. We expect to see the expansion of energy trade between the two countries, the diversification of the natural gas adoption and the stability of natural gas supply,” said Yang Ki-wook, chief of the Industry Ministry’s gas industry division.
On the same day, President Moon Jae-in met with US President Donald Trump in New York and told him, “We’ll be signing the deal to increase the import of LNG from America ... so I believe that all of this will come to reinforce our already strong alliance.”
By Shin Ji-hye (email@example.com)