Gorgon management said it would have struggled to be ready to supply large quantities of LNG by Kogas’s deadline of early 2008. It remained confident that Gorgon would be able to bid successfully for later tranches of demand into South Korea.
The new Kogas deal is for the supply of up to 6 million tonnes of LNG a year. It will replace an existing contract with Indonesian suppliers that expires in 2007.
Kogas has cut its original list of 12 preferred bidders to just five. It intends to further reduce the list over the next few weeks to just two or three suppliers and to sign preliminary supply agreements by the end of November.
The lead supplier will provide up to four million tonnes of LNG a year to Kogas. The remainder will be split between one or two other suppliers.
LNG is South Korea’s main source of energy. Kogas is the world’s single biggest buyer of LNG and is eager to lock in diverse supplies.
