KOGAS Goes Global To Be World-Class Energy Co.

expanded its business portfolio in such non-conventional energy resources as coal gas and shale gas

Kiorea Gas Corp. (KOGAS), the nation’s natural gas supplier, is devoting itself to expanding its business horizons, including petroleum exploration, with the goal of becoming a global energy company.
KOGAS has accomplished another feat in petroleum exploration in recent months as a consortium including KOGAS signed a contract with Iraq’s state-run North Oil Company to operate the Badra oilfield in Iraq on Jan. 28. KOGAS owns a 30 percent stake in the consortium, led by Gazprom with a 40 percent interest. The deal calls for producing a total of 800 million barrels of petroleum from the Badra field in southeast Iraq near the Iranian border during a 20-year contract period and allowing KOGAS to securing approximately 20 million barrels of oil.
KOGAS has also become a partner of a consortium led by Eni, which recently inked a technical service contract with Iraq’s state-run South Oil Company to redevelop the Zubair oilfield in Iraq. Eni holds a 32.8 percent stake in the consortium, comprising Oxy (23.44 percent), KOGAS (18.75 percent) and the Missan Oil Company (25 percent). KOGAS’ share of production from Zubair stand at 200 million barrels from 2010 to 2030.
Following these latest feats, KOGAS plans to strengthen its E&P capabilities in order to step up its presence in Iraq.
KOGAS President and CEO Choo Kang-soo told the Yonhap News Agency recently his company is negotiating the specifics of a project to supply natural gas in Siberia with Russia’s state-owned oil company Gazprom and the Siberian state government. Working-level talks on a project in Vladivostok are to be launched soon, and the project will be expanded to other areas of Siberia, he said.
Choo said the Russian government is now carrying out a project to lay a gas pipeline linking Sakhalin, Khabarovsk and Vladivostok, which is to be completed by 2011. A plan to extend the gas pipeline via North Korea to import natural gas from Russia is likely to be realized, but instead, a natural gas liquefaction and storage terminal will be installed in Vladivostok and 7.5 million tons or 28 percent of Korea’s natural gas imports will be imported from there via LNG carriers from 2015. The cost for transporting natural gas imports via Vladivostok may be as low as one-third of that for imports from Qatar, the transportation of which accounts for 15 percent of the unit price, he said.
CEO Choo said in his New Year’s message that KOGAS plans to expand its overseas business.
In regard to 2010 business tasks, Choo said KOGAS has expanded its business portfolio in such non-conventional gas energy resources as coal gas and shale gas. “We have already entered the oil P&E business by acquiring the right to develop oilfields in Iraq. Projects to tap coal gas and shale gas in Australia, Canada, Ukraine, Indonesia and Mongolia will be pushed ahead in earnest,” he said.
Second, Choo said, KOGAS, which devoted itself to the import, production and supply of natural gas in an initial stage of its establishment, has built a balanced vertical integration of the gas industry by entering the upstream and downstream gas industries. KOGAS’s bid to aggressively make inroads into the global upstream gas support business in the Middle East, Africa, Asia, Australia and the Americas is expected to bear fruit, he said.
Third, he said, KOGAS, which has imported liquefied natural gas primarily from the Middle East and Southeast Asia, is diversifying its import sources around the world horizontally.
Fourth, he stressed the globalization of KOGAS’s customer base. In an effort to carry out its mission of ensuring a safe, stable supply of natural gas to the people, he said KOGAS needs to be flexible in making demand predictions ― coping with rapid changes in domestic gas demand by securing third country gas importers as its customers.
Fifth, Choo touched on an across the board entry into the global market. KOGAS’s access to the world for overseas business was limited to the Resources Headquarters, but the Production Headquarters is pushing ahead with projects in Thailand and Mexico, where additional manpower will be dispatched this year, while overseas production operations will be expanded to such countries as Singapore, Poland and Russia, he said. The Supply Headquarters is expanding its business areas to plant export, overseas pipeline construction and overseas city gas business.
KOGAS plans to acquire capabilities for implementing package-type overseas projects, thus contributing to other Korean companies’ support for their entry abroad. A few examples of global collaboration include liquefaction terminal projects in Indonesia, Canada and Russia, a gas chemical project and compressed natural gas station projects in Uzbekistan, pipeline construction projects in Turkestan, dimethyl ether (DME) projects in Saudi Arabia and Mongolia and other projects in Mexico, Singapore and Poland, he said. nw

KOGAS President Choo Kang-soo signed a contract with Iraq’s state-run South Oil company to redevelop the Zubair oilfield in Iraq.