MUSCAT, Oman, April 1 -- Oman LNG and Korean Gas Corp. signed an agreement Monday confirming terms of a 25-year deal for the annual sale of 4 million tonnes (4.4 million tons) of Omani liquefied natural gas to Seoul. The pact added 1 million tonnes (1.1 million tons) to the previous amount of 3 million tonnes (3.3 million tons) of LNG agreed in 1995, with KOGAS taking the additional quantity, an official statement in Muscat said.
Delivery of LNG to South Korea starts early 2000. The statement said the response from potential arranger banks and export credit agencies to finance the building of OLNG's $2.5 billion LNG plant had been 'very positive and competitive,' and a key arranger group of banks would be appointed 'very shortly.' The agreement was signed in Seoul between KOGAS President Kap-Soo-Han and OLNG General Manager and Chief Executive Tony Hanna. The pact, which defines all the principal commercial terms, including price, had earlier been signed in Muscat by Omani Minister of Petroleum and Minerals Said bin Ahmed al-Shanfari. Four major international cosortia are preparing bids for the contract to build the 6.6 million-tonne-per-year (7.3 million-ton) plant, the statement said. The consortia are Kellogg/IGC; Bechtel/Snamprogetti/Technip; Chiyoda/Foster Wheeler; and Flour Daniel/Mitsubishi Heavy Industries/Mitsui Shipbuilding & Engineering. The government of Oman holds 51 percent equity in OLNG, with the remaining shares held by: Shell 34 percent, Total 6 percent, Partex 2 percent, Mitsubishi 3 percent, Mitsui 3 percent, and Itochu 1 percent. The statement said 5 percent of the equity will eventually be transferred to a Korean partner, but did not say which party will relinquish shares for the Koreans.