THE signing last week of a letter of intent by Korea Gas Corporation (KOGAS) to negotiate for liquefied natural gas from the North West Shelf venture was significant in a number of ways.
The event heralded Australia LNG’s second significant supply deal.
The first by the NWS project’s marketing arm was the 25-year deal to supply NWS LNG to China.
However, the signing – reportedly the first such term deal by KOGAS since 1995 – was also significant from a South Korean market perspective.
Unlike China, the South Korean company plans to take an annual 500,000 tonnes of LNG over seven years into an LNG market that already exists.
Uncertainty has surrounded this market for some time, with deliberations continuing on the privatisation and deregulation of KOGAS, and South Korea’s desire to eventually receive gas via a pipeline across Asia.
The WA Government has also welcomed the Korean development, valuing it at $1 billion, with the expectation of $80 million in royalties.
State Development Minister Clive Brown said further value would come from the added regional exposure of WA’s gas and proposed gas processing activities.
Australia LNG is continuing to investigate and pursue further LNG market-growing opportunities in China, Taiwan and India.
Pinetec offered funds
THE Western Australian Government has waved a $1 million carrot in front of Perth pine pallet manufacturer Pinetec Ltd as an incentive to bring part of the company’s operations to areas affected by the Government’s decision to reduce logging of old growth forests.
State Development Minister Clive Brown said the offer of financial assistance was conditional upon the company locating in the Shire of Collie and was also conditional upon the company receiving matching Federal Government funding.
If Pinetec takes the money and sets up a plant in the South West the Government believes it has the potential to create 40 new full-time jobs.
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