Korea Gas Corp. has approached long-term suppliers of liquefied natural gas (LNG) to defer up to 10 autumn cargos to winter, showing it is lumbered with excess supply and pulling out of spot markets, industry sources said.
High stocks and weak demand prompted state-run Kogas, the world's biggest corporate buyer of LNG, to offload a number of cargos this summer through a combination of time-swap deals and by deferring deliveries from suppliers.
Deferrals were first meant to include only summer cargos, but the program has been extended to include an additional five to 10 cargos in later delivery periods, traders said.
In total, Kogas is due to defer or swap out a total of 40 LNG cargos between May and November this year, a source with direct knowledge of the matter told Reuters.
Kogas has asked to defer cargos due to be delivered in early November as well as other periods, the source said.
As a result of the deferment, suppliers such as Malaysia's Bintulu export plant, Indonesia's Bontang, Russia's Sakhalin and Qatar's Rasgas have pumped more supply into the open market, the source said.
The latest deferments mean they may continue to add to global spot supply for a while longer.
Traders do not expect Kogas to resume buying spot cargos this winter, barring abnormally cold weather, which is not currently forecast for Korea and Japan, the world's biggest LNG importing nation.
(By Oleg Vukmanovic, Reporting by Oleg Vukmanovic; editing by Jane Baird)