Qatar, South Korea seal 2mta LNG supply deal
Doha Qatar will supply two million tonnes of liquefied natural gas (LNG) per annum to South Korea for twenty years. An agreement to this effect was signed between the two countries on Thursday the first day of South Korean President Lee Myung-bak's visit to Qatar.
At a separate event, the two sides signed a memorandum of understanding (MoU) on cooperation in industry, energy and natural resources. The MoU replaces the earlier one signed by the two countries in 2006.
Under the LNG deal, Ras Laffan Liquefied Natural Gas Company Limited 3 (RL 3) will sell two million tonnes per annum (Mta) of LNG to South Korean state-owned energy company Korea Gas Corporation (Kogas) for 20 years. The supply will begin next year.
The LNG going to Korea under the new long-term sale and purchase agreement (SPA) would be in addition to the incremental medium term LNG supplies from 2012 to 2016.
Minister of Energy and Industry His Excellency Dr Mohammad bin Saleh al Sada and Kogas Executive Vice President and Chief Operating Officer Young Sung Park signed the agreement.
Speaking after the signing ceremony, Sada said, "Kogas is the foundation customer of RasGas and with this new long-term SPA will again be the largest single purchaser of RasGas LNG." Last year, RasGas delivered over eight million tonnes of LNG to Kogas which is about a quarter of its total requirement and looks forward to delivering over 9 million tonness of LNG to Korea in 2012," he added.
The Ras Laffan LNG Company (RL) signed its first SPA with Kogas for 4.9 million tonnes of LNG per year in 1995 and the first delivery was made in 1999. The second SPA between RL (3) and Kogas was signed in 2007 for 2.1 million tonnes of LNG per year with first delivery made the same year.
As per the MoU for industry, energy and natural resources cooperation signed later in the day, the two countries will establish a joint steering committee, which will then organise two sub-committees to explore and identify projects in their respective cooperation sectors. The documents were signed by Minister of Energy and Industry His Excellency Dr Mohammad bin Saleh al Sada and the Korean Minister of Energy and Knowledge Economy Sukwoo Hong on behalf of their respective countries.
The new MoU replaces the previous 2006 agreement on energy cooperation between the Ministry of Energy and Industry and Korea's Ministry of Commerce, Industry and Energy. The members of the Qatar-Korea joint committee on energy cooperation, which was established pursuant to the 2006 MoU, will constitute the subcommittee for energy and natural resources cooperation under the new MoU.