MOSCOW (Reuters) - Gazprom said on Tuesday it has signed an agreement to sell liquefied natural gas (LNG) to Korea Gas Corporation (KOGAS), as it strengthens its position in Asian markets.
Gazprom Marketing & Trading Singapore, a wholly-owned subsidiary of Gazprom (GAZP.MM), said it will supply up to eight cargoes of LNG a year to KOGAS in 2013 and 2014, totaling up to 1 million metric tonnes (1.1 million tons) over the two years.
Gazprom already ships 1.6 million tonnes of LNG a year to KOGAS from its Sakhalin-2 project, which produces 10 million tonnes of LNG annually. Gazprom M&T would not necessarily sell Gazprom-produced gas but the contract could help it to secure a foothold in Asia, where it wants to sell gas from the giant fields of Eastern Siberia.
“This agreement also provides a good basis for further expansion of our commercial portfolio and realizing our ambition to be the leading LNG marketer in Asia Pacific,” Frederic Barnaud, executive Director for LNG & Shipping at Gazprom M&T said in the company’s statement.
Gazprom has been increasingly looking to diversify its markets away from Europe, its leading source of revenue but where gas demand is sagging. Earlier this month, Gazprom M&T signed a deal to sell LNG to India’s GAIL for 20 years.
Gazprom also harbors plans to expand production of LNG, frozen gas which is easier to market globally on tankers compared to pipeline gas, the backbone of the company’s operations.
Gazprom plans to set up LNG production at the Pacific port of Vladivostok, which may come on stream by 2020 with production ranging from 10 million tonnes to 20 million tonnes.
Its plans to establish LNG plant in North-West of Russia on the basis of Shtokman giant offshore deposit, has so far failed to materialize due to costs overrun.
(Reporting by Vladimir Soldatkin, editing by William Hardy)
This story corrects first bullet point in story transmitted on Oct. 9 to show Gazprom to sell 1 mln T of LNG, not 2 mln