* Seeks flexible contracts, some long-term deals expire in
* Wants to bring more U.S. shale gas, interested in gas
* Preparing smooth transition for 2025 gas market
By Jane Chung
SEOUL, March 10 Korea Gas Corp (KOGAS), the
world's second-biggest liquefied natural gas (LNG) buyer, will
seek flexible contracts to have more leeway to trade its LNG
cargoes down the road, its chief executive told Reuters on
The changes would follow similar efforts by LNG buyers in
Japan, the world's top LNG importer. 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, its long-term
contracts expire, before it can start to adjust its import
"Of course we are looking for flexible contracts," Lee
Seung-hoon, chief executive officer of state-run KOGAS, said in
an interview in Seoul. "The market has been a seller's market
... it would be good if buyers can swap when they are short of
cargoes or they have more."
Of KOGAS's long-term contracts, a 4.92 million
tonnes-per-year (tpy) supply deal with Qatar, Korea's top LNG
supplier, will expire in 2024 and another 4.06 million tpy deal
with Oman will end in 2024. The company imports about 30 million
Lee said he was unsure if KOGAS would extend those deals
"but terms will change and we won't do it on the same terms."
KOGAS is willing to bring more natural gas from the United
States amid increasing U.S. shale gas output, Lee said.
The company signed up in 2012 for 2.8 million tpy of U.S.
LNG with Texas-based Cheniere, under a 20-year supply deal
starting this year. The first U.S. LNG cargoes are set to arrive
in South Korea this summer.
"We intend to (buy more) but we don't have a fixed
plan....we're thinking to import more by participating in gas
liquefaction plant projects as major players," he said.
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.
To keep the domestic gas market from being oversupplied or
undersupplied, Lee said the government is likely to set a quota
for buyers and in hopes to carry out an "orderly" transition.
Lee, who took his post in 2015, said he aims to find more
investment opportunities during his remaining 1-1/2 years left
on the job to move KOGAS to a natural gas producer as well as a
(Reporting By Jane Chung; Editing by Christian Schmollinger)