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Trafigura said this agreement “expects substantial volumes of LNG to be delivered to Kogas over the next decade.”
The pricing index will be Henry Hub, the US natural gas benchmark.
Trafigura said it will meet this commitment through its offtake agreements with LNG producers, including US LNG exporting giant Cheniere, and Trafigura’s global LNG portfolio.
Trafigura has a long-term LNG supply deal with Cheniere.
The 15-year deal started back in 2019 and Trafigura buys about 1 million tonnes a year of LNG from Cheniere.
The trader noted that the deal with Kogas strengthens Trafigura’s position in the global LNG market.
Trafigura did not provide further details regarding the deal.
Diversifying LNG import sources
Local media reported in South Korea, citing a Kogas statement, that South Korea will additionally buy 3.3 million tons of LNG from the US per year for a decade, starting in 2028, as the two countries look to expand cooperation across key sectors.
The contract is expected to help Kogas diversify its LNG import sources, which had been concentrated in the Middle East, including in Qatar.
Yeonhye Choi, CEO of Kogas, said the signing of this agreement with Trafigura marks a “significant step toward establishing a reliable partnership amid rising uncertainty in the global market.”
“This agreement is expected to diversify import channels while contributing to the stability of energy supply to Korea,” Choi said.
Kogas currently 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 also has a small-scale regasification terminal at the Aewol port on Jeju Island.
Kogas is also building the Dangjin LNG terminal and has just awarded a contract for the second phase of the project.
The company sold 18.89 million mt in the first half of this year, up by 3.7 percent compared to the same period last year.