The LNG will be used to power K Power's new 1074MW power station being built at Gwangyang in southwestern South Korea, due to commence operations in 2006. K Power, formerly known as SK Power, is a joint venture between SK Corporation (with 65 per cent) and BP (35 per cent).
Today's signing follows an earlier agreement, signed in July, for the supply of 550,000 tons of LNG a year to POSCO, Korea's largest steelmaker, and completes the process outlined in the heads of agreement signed between SK Corporation and the Tangguh partners in July 2003.
The LNG supplied under both agreements will be delivered to POSCO's new Gwangyang LNG import and regasification terminal, which is currently under construction.
Anne Quinn, Group Vice President of BP's Gas, Power & Renewables business, commented: "This agreement is another important step in the development of the Tangguh LNG project which is firmly on track to meet the gas requirements of Tangguh's customers in Asia and North America. Together with our existing Chinese and South Korean sales agreements and the almost finalised deal for supply to Mexico and US markets, the Tangguh project is making excellent progress towards a final investment decision later this year."
In addition to the K Power contract, the Tangguh Project has sales and purchase agreements in place for the supply of 0.5 million tons of LNG a year to Posco of S. Korea, and 2.6 million tons of LNG a year to China's Fujian LNG import terminal. The project is also in the process of finalizing a further agreement to supply up to 3.7 million tons of LNG a year to Sempra Energy's proposed LNG import terminal at Costa Azul, Mexico.
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