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Kospo said it will receive a total of 4.4 million tons of natural gas from Kogas for 10 years from 2027.
Unlike the existing “average rate system” where Kogas supplies gas uniformly to all power generators at the average price of all its LNG import contracts, this contract includes the “individual pricing system”, according to Kospo.
This system links specific LNG import contracts to individual power generators, supplying gas directly at the price and conditions of that specific contract, it said.
Kospo noted that through this contract with Kogas, Kospo has diversified its supply portfolio beyond direct natural gas imports.
The power firm buys spot LNG supplies to fuel its power plants.
According to Kospo’s website, the firm has seven LNG power plants: Shinincheon, Busan, Namjeju, Yeongwol, Andong, ShingSejong, and Hanlim.
On the other hand, Kogas operates 77 LNG storage tanks at five LNG import terminals in South Korea.
The large terminals include Incheon, Pyeongtaek, Tongyeong, and Samcheok, while the firm has a small-scale regasification terminal at the Aewol port on Jeju island as well.
In addition to these facilities, the firm is building a large terminal in the western port city of Dangjin.
Kogas imports LNG from various sources, and it just signed a long-term deal to buy US LNG from trader Trafigura.
The company stated that it will purchase 3.3 million tons of LNG from the US annually for a decade, starting in 2028, as the two countries aim to expand cooperation across key sectors.
KOgas said the contract is expected to help the company diversify its LNG import sources, which had been concentrated in the Middle East, including in Qatar.