According to South Korea’s Ministry of Knowledge Economy, which endorsed the deal, the contract will be signed in September with Royal Dutch Shell PLC along with French-owned Total SA for the sale of 5.64 million metric tons of LNG a year, which equates to 17 per cent of South Korea’s gas consumption in 2010.
Australia will export 3.64 million tons of LNG a year for 20 years from Shell’s Prelude gas field in to state-owned Kogas, commencing between 2015 and 2018, the Ministry of Knowledge Economy said. Total SA will supply 2 million tons a year between 2014 and 2031 from fields in locations including Australia, Nigeria, Norway and Egypt. The LNG shipments are valued at $US84 billion, according to the statement.
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With South Korea’s long-term supply contracts for LNG from Indonesia, Malaysia and Brunei set to expire between 2013 and 2015, the doors were opened for new suppliers to step in. South Korea is Asia’s fourth-largest economy and aims to increase its dependence on gas to 15.8 per cent of energy consumption by 2030 from 15.6 per cent in 2010.
Korea Gas also plans to buy a 10 per cent stake in Shell's Prelude project after signing the gas contract, the Ministry of Knowledge Economy said.
In 2010, South Korea imported 32.6 million tons of gas from Indonesia, Malaysia, Oman, Qatar and Russia, according to Bloomberg.