KOGAS to receive first LNG cargo from Cheniere in July; this marks start of 20-year supply contract.
Korea Gas Corp (KOGAS) will early next month receive its first liquefied natural gas (LNG) cargo under a long-term supply deal with U.S. exporter Cheniere Energy, two sources at the South Korean company said on Friday.
The 74,000-tonne LNG cargo was loaded from Cheniere's Sabine Pass export terminal in Louisiana
and is scheduled to arrive at the port of Tongyeong, South Korea on July 2, one of the sources said. Both sources declined to be identified.
The 20-year supply deal, under which KOGAS will receive 2.8 million tonnes of the supercooled fuel per year from Cheniere, had long been expected to kick in this year, but its exact start time was not known in markets.
The commencement of the deal could weigh on spot LNG demand in Asia as it means KOGAS will likely have less appetite for spot supplies, said a Singapore-based LNG trader.
South Korea, the world's No.2 LNG importer, mostly ships in the commodity through state-run KOGAS. The company imports about 30 million tonnes of LNG per year, mainly from Qatar.
The SM Eagle, the vessel carrying the first Cheniere cargo, is currently en route in the Pacific Ocean after sailing through the Panama Canal following loading on June 2, according to shipping data in Thomson Reuters Eikon.
In January, South Korean gas and power company SK E&S took delivery of the country's first spot cargo of shale gas imported from the Sabine Pass LNG terminal.
In the first five months of this year, South Korea imported nearly 16.2 million tonnes of LNG, up 14.2 percent from the same period in 2016, according to customs data. Of that, 298,066 tonnes were U.S. supplies.
Reporting by Jane Chung