South Korea’s government gave approval to Korea Gas Corp. to import liquefied natural gas from Royal Dutch Shell Plc and Total SA.
The state-run utility will buy 3.64 million metric tons of LNG a year from Shell’s Prelude gas project in Australia for 26 years starting 2014, the Ministry of Knowledge Economy said in an e-mailed statement today. It will also buy 2 million tons of the fuel a year from Total’s gas projects in Australia, Norway and Egypt for 18 years starting 2013, the statement said.
The shipments are valued at 90 trillion won ($84 billion) and are equivalent to 17 percent of Korea’s gas consumption in 2010, according to the statement. Korea Gas plans to sign the contracts in September.
“The deals to import 5.64 million tons are the biggest in the country’s history and will contribute to the stable supply of the fuel,” the ministry said in the statement.
South Korea, which imports almost all its energy needs, aims to add to its sources of oil and gas as long-term contracts with Indonesia, Malaysia and Brunei are due to expire from 2013 to 2015. Asia’s fourth-largest economy aims to increase its reliance on gas to 15.8 percent of energy consumption by 2030 from 15.6 percent in 2010.
Korea Gas also plans to buy a 10 percent stake in Shell’s Prelude project after signing the gas contract, the statement said.
South Korea last year imported 32.6 million tons of gas. Indonesia, Malaysia, Oman, Qatar and Russia accounted for 77 percent of its LNG shipments.