South Korea approved $84bn long-term supply agreement to import LNG from Shell and Total. Kogas signed preliminary agreements to import a combined 7.6 bcm/year of LNG, equivalent of 17% of the country's gas consumption, from 2013 to 2035. The contracts aims to replace contracts with Indonesia, Malaysia and Brunei totalling 6.3 bcm/year of LNG that will expire between 2013 and 2015.
Shell will start deliveries as of 2013: it will deliver 4.9 bcm/year of LNG from the Prelude FLNG project (Australia) as of 2017. Until then, the gas supply (1.35 bcm/year) will come from Russia (Sakhalin 2) and from Nigeria. Kogas will also acquire a 10% interest in Shell-led Prelude FLNG project in Australia ($1.5bn). Under the terms of the agreement signed with Total, LNG deliveries are expected to start in 2014 until 2031. Total will supply LNG from its international portfolio (Nigeria, Norway, Egypt), until the start of the Ichtys LNG project in Australia (expected by 2016-2017).