Trafigura signed a long-term supply purchase agreement (SPA) to supply LNG to South Korean major importer Kogas. Trafigura will supply Kogas with about 700,000 t/yr of LNG under the SPA. The deal was signed at around 120-121pc of the US Henry Hub with an exact constant heard to be around USD 4.20/mn Btu, traders added.
Over the next 10 years, Trafigura will supply LNG to KOGAS using gas it buys from producers like Cheniere Energy, as part of its global supply network.
Kogas may also be close to finalizing separate SPAs with TotalEnergies and BP for around 1mn t/yr of LNG, respectively. The final offer from TotalEnergies was understood to be on a des basis at a slope of about 119pc of the Henry Hub with a constant of around USD 4/mn Btu, traders said. Meanwhile, the final offer from BP was understood to be on a des basis, around low to mid-11pc of Brent.
The offers are fewer because Kogas tends to offer more flexibility to its suppliers in the contracts. Kogas can offer this flexibility because it owns multiple terminals as well as storage facilities across South Korea and typically buys in large quantities.
Executive Statement
According to the chief executive, Yeonhye Choi, this deal also serves to diversify Kogas' import channels and contribute to the stability of South Korea's energy supply.