For Stable Supply of LNG

Kogas signs MOU with Oman to jointly build, operate LNG terminal

The Ministry of Commerce, Industry and Energy has been working on measures to cope with the uncertainties in the supply of LNG across the country, especially in the winter season, where demand for the product is concentrated heavily. The ministry has been promoting the construction of LNG storage terminals with LNG producing countries.
Under the policy, the Korea National Gas Corp. signed an MOU with the Oman LNG Department at the InterContinental Hotel in downtown Seoul on June 26, providing for the construction and operation of the LNG terminal to be jointly owned by the two countries involved, MOCIE officials said recently.
President Lee Soo-ho of the Kogas and Ahmed Macki, Oman's Economic Minister signed the agreement with Lee Won-gul, vice minister of the MOCIE as the witness. The project will have the support of the governments of the two countries. The MOU is based on the agreement signed in November, last year between the Korean and Oman's government spurring the exchange of energy resources between the two countries and is being regarded as a test-case of the cooperation between the two countries in the area of energy as spelled out in the agreement.
The construction of the joint LNG terminal with Oman is expected to contribute to the stable LNG supply in the country, especially, during the winter, where the demand for the heating fuel is heavily concentrated and dealing with the uncertainties in the LNG supply in the international market.
When the demand for LNG rises in the winter, the LNG stored in the joint terminal can be tapped for increased heating fuel, securing stable supply of the petroleum product. Oman currently supplies 19.4 percent of Korea's LNG imports annually or 2.23 million tons, being the fourth largest supplier of the petroleum product, after Qatar with 27.9 percent, Indonesia with 25 percent, and Malaysia with 21.1 percent.
The relationship between Korea and Oman will spread to other areas than the LNG trade such as the construction of joint infrastructures and technology cooperation, which would give the Korean government the chance to secure a channel to collect information on LNG producing countries, their policies and details of the LNG market, the MOCIE officials expected.
In the meantime, Vice Minister Lee and Ahmed Macki, Omanese Minister of National Economy met and discussed a steadfast cooperation between Korea and Oman in energy fields and agreed to build a channel for development.
The MOU provides for mutual cooperation in the LNG area and the joint construction and operation of the LNG terminal to be built in Korea. The agreement will also facilitate the exchange of information on technology, commercial aspects and personnel. It also provides for the establishment of a joint feasibility survey committee to search for potential opportunities in the energy business.
Kogas's domestic projects: . As for the direct impact of such exploration works, Kogas expects an import substitution effect for the natural gas whose demand recently has shown a rapid increase, worth 5 million tons in quantity and at least more than US$1.2 billion per annum, with an announcement of successful commercialization of a gas field for the first time in Korea to have a strong foothold on the capability of energy self-sufficient nation as well as such remarkable development in the fields of engineering, heavy industries and other related industries. nw

Lee Won-gul, vice minister for energy at the MOCIE, shakes hands with Oman'Economics Minister Ahmed Macki after signing an MOU in Seoul June 26 with President Lee Soo-ho of the Korea Gas Corp.