Korea Gas had agreed in principle to exercise its options to buy 700,000 tonnes from Total's Yemen LNG project and 500,000 tonnes from Shell's Malaysian ventures, boosting planned total annual purchases to about 5.5 million tonnes, Korea Gas' LNG purchasing team manager Oh Seung-hwan is reported as saying yesterday.

Korea Gas in February agreed to buy US$20 billion of LNG starting in 2008 over 20 years from Shell's ventures in Malaysia and Russia and from the Yemen LNG project. Under the initial agreements, Malaysia LNG Tiga Sdn, 15% owned by Shell, was to supply 1.5 million tonnes a year of LNG, Shell's East Russian Sakhalin Island venture 1.5 million tonnes, and Total's Yemen project 1.3 million tonnes a year.

BP Plc said in June that government-owned Korea Gas wanted to buy stakes in overseas LNG projects to secure supplies and meet rising domestic energy consumption, with South Korea's demand for LNG forecast to increase by up to 5% annually over the next 10 years.