UPDATE 1-KOGAS to build $345 mln energy plant in Saudi Arabia

(Adds KOGAS confirmation and share prices)

SEOUL, Oct 21 (Reuters) - South Korea's state-run KOGAS 036460.KS will invest about 400 billion won ($344.9 million) to build an energy plant in Saudi Arabia, the company said on Wednesday.

Earlier in the day, the Maeil Business Newspaper cited sources at the economy ministry and KOGAS as saying that the company would sign a preliminary deal with the Saudi Arabian government on Nov. 2 for the plant in Jubail, which would have an annual capacity of 300,000 tonnes of dimethylether (DME) from 2013.

DME is mainly made from the synthesised gas by cracking natural gas, coal and bio-mass, and is considered cheaper and cleaner than liquefied petroleum gas.

Shares of KOGAS, the world’s largest corporate buyer of liquefied natural gas, lost 1.29 percent to 53,700 won as of 0216 GMT, underperforming the broader market. ($1=1159.7 Won) (Reporting by Seo Eun-kyung and Cho Mee-young; Editing by Ken Wills)