By Shinhye Kang
May 7 (Bloomberg) -- Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, plans to spend 17.8 trillion won ($15.5 billion) by 2017 on overseas expansion to bolster supplies of the cleaner-burning fuel, its chief executive said.
“We are seeking opportunities overseas including gas development, gas pipeline investment, LNG terminal construction and city-gas distribution,” Choo Kang Soo said in an interview today. He didn’t say where the investment funds will come from.
South Korea, which imports almost all its energy needs, is urging state-run companies to intensify overseas acquisitions, pitting them against rivals including PetroChina Co. and Oil & Natural Gas Corp. in the global race for resources. Korea Gas has begun talks to buy stakes in Royal Dutch Shell Plc’s Prelude project and Santos Ltd.’s Gladstone in Australia, Choo said.
“The potential deals in Australia would make Korea Gas less dependent on the Middle East and Southeast Asia,” said Yang Ji Hwan, an analyst at Daishin Securities Co.
South Korea imported 25.8 million metric tons of LNG last year, with Qatar, Oman, Indonesia and Malaysia supplying almost 80 percent of it. Natural gas in New York has fallen 30 percent since January last year. “The aggressive investment plan will be rewarded when energy prices rise in the future,” Yang said.
Shell owns 100 percent of Prelude in the Browse Basin. Santos holds a 60 percent stake in Gladstone, while Malaysia’s Petroliam Nasional Bhd. has a 40 percent share in the venture.
Claire Wilkinson, a spokeswoman for Shell in Perth, said the company doesn’t comment on specific commercial opportunities. Jeremy Milne, a spokesman for Santos in Adelaide, couldn’t be immediately reached by telephone for comment.
Chinese Rivals
Korea Gas is already in talks with Chevron Corp. on a stake in the Wheatstone LNG venture in Western Australia and fuel purchases from the project. This year is the best time to acquire stakes in overseas fields as natural gas prices are stable and Chinese demand for LNG isn’t strong, Choo said.
China National Offshore Oil Corp. agreed in March to buy 3.6 million tons of LNG annually from BG Group Plc’s Queensland Curtis venture in Australia’s largest export deal for the fuel. PetroChina signed with Exxon Mobil Corp. in August to purchase 2.25 million tons a year from the Gorgon venture.
“In the future, China will be an important factor in the LNG market as Chinese demand for the cleaner-burning fuel will increase sharply,” Choo, 65, said in his office at the utility’s headquarters in Seongnam.
PetroChina, Asia’s biggest company by market value, plans to spend at least $60 billion in the next decade on overseas acquisitions. The Chinese company teamed up with Shell in March to buy Australian gas producer Arrow Energy Ltd. for $3.2 billion.
Overseas Gas Production
The South Korean company plans to increase gas production from overseas fields in which it has stakes to 8.55 million tons a year by 2017 from 380,000 tons in 2009, Choo said.
Korea Gas is studying the feasibility of developing coal- seam gas fields owned by Blue Energy Ltd., he said. The utility is monitoring Australia’s proposed plan to impose a 40 percent tax on the profits of resource companies, he said.
The utility is considering selling some stakes in overseas assets it already owns to South Korean companies as part of its fund-raising efforts for new projects, according to Choo.
The shares dropped 9.9 percent this year in Seoul trading, compared with the 2.1 percent decline in the benchmark Kospi index. Korea Gas fell 1.1 percent to close at 43,800 won today.
Korea Gas may sell 2 trillion won of new shares to domestic buyers and overseas investors in the form of depositary receipts, the utility said in September. The company is considering gradually boosting its market capitalization to 8 trillion won by 2013 from 4 trillion won, Korea Gas said then.
“We don’t have a specific plan to sell new shares currently,” Choo said.
Source: http://www.bloomberg.com/apps/news?sid=a_9w7XV.f_FI&pid=20601087
May 7 (Bloomberg) -- Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, plans to spend 17.8 trillion won ($15.5 billion) by 2017 on overseas expansion to bolster supplies of the cleaner-burning fuel, its chief executive said.
“We are seeking opportunities overseas including gas development, gas pipeline investment, LNG terminal construction and city-gas distribution,” Choo Kang Soo said in an interview today. He didn’t say where the investment funds will come from.
South Korea, which imports almost all its energy needs, is urging state-run companies to intensify overseas acquisitions, pitting them against rivals including PetroChina Co. and Oil & Natural Gas Corp. in the global race for resources. Korea Gas has begun talks to buy stakes in Royal Dutch Shell Plc’s Prelude project and Santos Ltd.’s Gladstone in Australia, Choo said.
“The potential deals in Australia would make Korea Gas less dependent on the Middle East and Southeast Asia,” said Yang Ji Hwan, an analyst at Daishin Securities Co.
South Korea imported 25.8 million metric tons of LNG last year, with Qatar, Oman, Indonesia and Malaysia supplying almost 80 percent of it. Natural gas in New York has fallen 30 percent since January last year. “The aggressive investment plan will be rewarded when energy prices rise in the future,” Yang said.
Shell owns 100 percent of Prelude in the Browse Basin. Santos holds a 60 percent stake in Gladstone, while Malaysia’s Petroliam Nasional Bhd. has a 40 percent share in the venture.
Claire Wilkinson, a spokeswoman for Shell in Perth, said the company doesn’t comment on specific commercial opportunities. Jeremy Milne, a spokesman for Santos in Adelaide, couldn’t be immediately reached by telephone for comment.
Chinese Rivals
Korea Gas is already in talks with Chevron Corp. on a stake in the Wheatstone LNG venture in Western Australia and fuel purchases from the project. This year is the best time to acquire stakes in overseas fields as natural gas prices are stable and Chinese demand for LNG isn’t strong, Choo said.
China National Offshore Oil Corp. agreed in March to buy 3.6 million tons of LNG annually from BG Group Plc’s Queensland Curtis venture in Australia’s largest export deal for the fuel. PetroChina signed with Exxon Mobil Corp. in August to purchase 2.25 million tons a year from the Gorgon venture.
“In the future, China will be an important factor in the LNG market as Chinese demand for the cleaner-burning fuel will increase sharply,” Choo, 65, said in his office at the utility’s headquarters in Seongnam.
PetroChina, Asia’s biggest company by market value, plans to spend at least $60 billion in the next decade on overseas acquisitions. The Chinese company teamed up with Shell in March to buy Australian gas producer Arrow Energy Ltd. for $3.2 billion.
Overseas Gas Production
The South Korean company plans to increase gas production from overseas fields in which it has stakes to 8.55 million tons a year by 2017 from 380,000 tons in 2009, Choo said.
Korea Gas is studying the feasibility of developing coal- seam gas fields owned by Blue Energy Ltd., he said. The utility is monitoring Australia’s proposed plan to impose a 40 percent tax on the profits of resource companies, he said.
The utility is considering selling some stakes in overseas assets it already owns to South Korean companies as part of its fund-raising efforts for new projects, according to Choo.
The shares dropped 9.9 percent this year in Seoul trading, compared with the 2.1 percent decline in the benchmark Kospi index. Korea Gas fell 1.1 percent to close at 43,800 won today.
Korea Gas may sell 2 trillion won of new shares to domestic buyers and overseas investors in the form of depositary receipts, the utility said in September. The company is considering gradually boosting its market capitalization to 8 trillion won by 2013 from 4 trillion won, Korea Gas said then.
“We don’t have a specific plan to sell new shares currently,” Choo said.
Source: http://www.bloomberg.com/apps/news?sid=a_9w7XV.f_FI&pid=20601087
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