from Business Spectator today:Reuters SEOUL State-run Korea Gas...

from Business Spectator today:

Reuters

SEOUL State-run Korea Gas Corp (KOGAS) is considering selling a 10 per cent stake in the Gladstone liquefied natural gas project, a company official said.

"We are considering reducing our stake in the project due to various reasons such as investment costs and a freeze in domestic gas prices," said the official who did not wish to be identified as he was not authorised to speak to the media.

The company has yet to approach potential buyers but is likely to tap Korean firms, the official said.

KOGAS's board approved this week a deal to buy a 15 per cent stake in the Gladstone project for 675 billion won ($US607.8 million) in cash from energy firm Santos and Malaysia's Petronas.

KOGAS will also import 3.5 million tonnes of liquefied natural gas (LNG) per year from Gladstone for 20 years starting in 2015.

KOGAS's decision to sell down some stake comes as no surprise, said CLSA analyst Di Brookman, adding any buyer would likely pay a higher price for Kogas's stake. With Kogas signed on as a gas buyer to the project, Santos has secured buyers most of the gas the project will produce, increasing the value of the equity stake.

CLSA has flagged Mitsubishi as one of the possible buyers for a stake in GLNG.

The project is a joint venture between Santos, Petronas, France's Total and KOGAS.

The 7.8 million tonne-per-annum (mtpa) project is expected to start exporting LNG in 2015, generating about $US6 billion in estimated average gross revenue per annum for the 7 mtpa that Santos has sold under long-term contracts.

KOGAS is also in a long-term contract of 3.5 mtpa over 20 years.

"We've always known it was (KOGAS's) intention (to sell down its stake) and our deal provides for that," said Matthew Doman, a spokesman for Santos.