It has been reported that South Korea’s State-run Korea Gas Corp (KOGAS) could issue an invitation to bid (ITB) for a LNG contract estimated to be worth up to US$20 billion as early as this week.
It is understood the long-term contract, reportedly for the supply of 5,000,000 tonnes of LNG, relates to Indonesian supply contracts due to expire in 2007. The KOGAS contract, held by the ExxonMobilled Arun LNG consortium in Indonesia, needs to be finalised by 2007, meaning contracts need to be in place by the end of 2005.
The ITB is likely to have sparked interest in a number of local LNG players such as Woodside, ChevronTexaco, the North West Shelf joint venture (ALNG) and Shell.
Woodside and Chevron are believed to have existing or future capacity, which could be made available to meet KOGAS’ requirements.
Adding weight to a Woodside or a Chevron-led bid is the fact that representatives from both companies accompanied WA Energy Minister Eric Ripper to South Korea last month.
According to a report by global energy information provider Platts, potential suppliers for the Kogas contract will have to agree to accommodate any changes in Kogas if restructuring goes ahead.
But the report also said whichever restructuring route the Korean Government decides on, the supplier will be guaranteed continuity of the contract.
