KOGAS Considers Selling Stake in Australia LNG Project
SEOUL, Sept 26 (Reuters) - State-run Korea Gas Corp is considering selling at least part of its 15 percent holding in the $18.5 billion Gladstone LNG (GLNG) project, the South Korean company told the stock exchange in a filing on Thursday.
KOGAS, the world's largest corporate buyer of LNG, did not say in the filing how much of the stake it might sell.
The announcement comes after South Korea initiated a review of its overseas investments in oil and gas due to poor profitability, particularly those made in the last five years.
Another state-run firm, Korea National Oil Corporation (KNOC), said on Tuesday that it is considering selling "non-core parts" of its loss-making Canadian energy subsidiary Harvest Operations and also reviewing other overseas assets for potential sales of some of their parts.
Asia's fourth-largest economy is heavily dependent on energy imports and rapidly expanded overseas investments to develop oil and gas reserves between 2008 and 2012, as it grappled with inflation driven by rising import costs.
But the new government installed this past February has said it is focused more on quality than quantity of its energy investments.
KOGAS bought a stake in GLNG in Australia in 2011 in a bid to boost South Korea's gas supply.
The project, part of a $190 billion surge in new LNG capacity development under way in Australia, has seen costs rise around 16 percent from its original estimate of $16 billion.
GLNG is set to begin producing gas in 2015. Australia's Santos owns 30 percent of the project, while Malaysia's Petronas and Total own 27.5 percent each.
GLNG has an estimated capacity of 7.8 million tonnes per annum and has binding offtake agreements with both Petronas and KOGAS for 3.5 mtpa over 20 years.
Santos said KOGAS's announcement did not come as a surprise.
"We've been aware that that was their intention from the very beginning," a Santos spokesman told Reuters via phone.
KOGAS last November said it would invest $1.3 billion to develop the GLNG project in addition to its initial injection of US$610 million to buy the GLNG stake in February 2011.
(Editing by Clarence Fernandez and Tom Hogue)
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