Seoul: State-run Korea Gas Corp (KOGAS) is considering selling a 10% stake in Australia’s Gladstone liquefied natural gas project, a company source said on Thursday.
“We are considering reducing our stake in the project due to various reasons such as investment costs and a freeze in domestic gas prices,” an official at the company told Reuters.
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% stake in the Gladstone project for 675 billion won ($607.8 million) in cash from Australian energy firm Santos and Malaysia’s Petronas.
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 $6 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.
Shares in KOGAS fell 2% by 08:20 am, versus a 0.7% fall in the broader market.