buying opp, page-6

Hi Tui, I think the article is worth repeating on the BUL thread. (thanks to TBE)

May 7 (Bloomberg) -- Korea Gas Corp., the worlds biggest buyer of liquefied natural gas, plans to spend 17.8 trillion won ($15.5 billion) by 2017 on overseas expansion to augment supplies of the cleaner-burning fuel, its chief executive said.

The utility is seeking opportunities overseas including gas development, gas pipeline investment, LNG terminal construction and city-gas distribution, Choo Kang Soo said in an interview today. He didnt say where the investment funds will come from.

South Korea, which imports almost all its energy needs, is urging state-run companies to intensify overseas acquisitions, pitting them against rivals including PetroChina Co. and Oil & Natural Gas Corp. in the global race for resources. Korea Gas is keen to buy stakes in planned LNG projects off the coast of Australia from Royal Dutch Shell Plc and Santos Ltd., Choo said.

We have begun negotiations to buy stakes in projects including Shells Prelude project and Santoss Gladstone, Choo, 65, said in his office at the utilitys headquarters in Seongnam. He didnt elaborate on the size and value of the stakes.

Claire Wilkinson, a spokeswoman for Shell in Perth, said the company doesnt comment on specific commercial opportunities. Jeremy Milne, a spokesman for Santos in Adelaide, couldnt be immediately reached by telephone for comment.

Korea Gas is already in talks with Chevron Corp. on a stake in the Wheatstone LNG venture in Western Australia and fuel purchases from the project. This year is the best time to acquire stakes in overseas fields as natural gas prices are stable and Chinese demand for LNG isnt strong, Choo said.

Chinese Rivals

China National Offshore Oil Corp. agreed in March to buy 3.6 million metric tons of LNG annually from BG Group Plcs Queensland Curtis venture in Australias largest export deal for the fuel. PetroChina signed with Exxon Mobil Corp. in August to purchase 2.25 million tons a year from the Chevron-led Gorgon venture. South Korea imported 25.8 million tons of LNG last year.

In the future, China will be an important factor in the LNG market as Chinese demand for the cleaner-burning fuel will increase sharply, Choo said.

PetroChina, Asias biggest company by market value, plans to spend at least $60 billion in the next decade on overseas acquisitions. The Chinese company teamed up with Shell in March to buy Australian gas producer Arrow Energy Ltd. for $3.2 billion.

Korea Gas is studying the feasibility of developing coal- seam gas fields owned by Blue Energy Ltd., Choo said. The utility is monitoring Australias proposed plan to impose a 40 percent tax on the profits of resource companies, he said.