KOGAS's Strategic LNG deals in Australia, Indonesia

Korea Gas Corp (KOGAS) is planning to acquire stakes in Australian and Indonesian LNG projects to secure stable supplies, the state-run utility said in a report.

The world's largest LNG buyer said it was in talks to acquire a 15% stake in a coal seam gas project led by Australia's Santos Ltd and a 9.8% stake in Indonesia's Senoro Toili project run by Japan's Mitsubishi Corp.

The company did not provide a financial value for either of the potential deals, but sources with knowledge of the Australian deal said in August that KOGAS would invest more than US$1 Bn in the Santos's Gladstone LNG (GLNG) project.

"The US $1 Bn fundraising report lends credence to the first report that KOGAS will take a larger 15% of GLNG, rather than the 10 percent commonly reported previously," said Benjamin Wilson, an analyst with JP Morgan in a note.

"We think this news implies Kogas is confident it will achieve Korean government approval to contract/purchase soon," Wilson said.

Total paid US$597.4 MN for 15% of the coal seam gas-fed LNG project in Australia's north east state of Queensland in September.

Santos currently owns 45% of Gladstone, Petronas has 35% and Total holds 20%.

In addition to buying a stake in the GLNG project, KOGAS has also been expected to sign an offtake agreement for 2 million tonnes per annum of LNG from the project.

The state-run utility sold 24.6 MMT of LNG in 2009 and said in February that it was planning to spend about US$895.4 MN this year on overseas resource development to secure energy supplies for Asia's fourth-largest economy.