Gazprom today has supplied its first liquefied natural gas (LNG) cargo to the Republic of Korea.

The transaction was effectuated via Gazprom Marketing & Trading Ltd., which is part of the Gazprom Group of companies.

The LNG was purchased from Mitsubishi Corporation, which had bought it from Celt (a joint venture between Mitsubishi Corporation and Tokyo Electric Power, Inc.).

145,000 cubic meters of LNG (some 92 million cubic meters of natural gas) were supplied ex-ship to the KOGAS owned Pyeongtaek regasification terminal.

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At present, the Republic of Korea is almost fully dependent on LNG imports. The South Korean gas market is featured by a manifold gas transmission network linking onshore LNG terminals with major consumption provinces, which helps widely use natural gas both in the power generation and industrial & household sectors.

Entering the Gazprom Group of companies, Gazprom Marketing & Trading Ltd. was established in the UK in 1999. In August 2005, the company entered with Shell Western BV and BG Group into an agreement to supply LNG to the US market. The first LNG carrier arrived at the Cove Point regasification terminal (Maryland, USA) on September 2, 2005.

In November 2005, Gazprom Marketing & Trading Ltd. signed an LNG supply agreement with Gaz de France, MED LNG & GAS and Shell. An LNG carrier was sold to Shell Western LNG and supplied to the Cove Point regasification terminal in early December 2005.

In April 2006, Gazprom Marketing & Trading Ltd. effectuated the first LNG shipment to the UK-based Isle of Grain terminal. The LNG was purchased from Gaz de France and sold to British Petroleum owning capacity at the receiving terminal. The LNG supply volume averaged 140 thousand cubic meters (some 85 million cubic meters of natural gas).

Mitsubishi has been involved in liquefied natural gas trading since 1969. The company is a partner in the North West Shelf upstream project for Australia’s northwest continental shelf, a stakeholder in Brunei LNG (Brunei), MLNG Satu, MLNG Dua and MLNG Tiga (Malaysia), Oman LNG and Qalhat LNG (Oman) as well as an investor in the Tangguh LNG plant construction project in Indonesia.

In October 2005, Gazprom and Mitsubishi Corporation signed a Memorandum of understanding.

On August 8, 2006, Gazprom Marketing & Trading Ltd. and Tokyo Electric Power, Inc. entered into a framework agreement to trade in liquefied gas.

Founded in 1983, Korea Gas Corporation (KOGAS) is a 62 per cent state-run company. KOGAS’ major business lines are construction and operation of LNG import terminals and gas distribution stations, implementation of international gas projects and research for the gas industry. The company owns three LNG import terminals.

On May 12, 2003, Gazprom and KOGAS entered into a five-year Agreement of cooperation. The Agreement covers a broad spectrum of issues including potential deliveries of Russian natural gas to the Republic of Korea.

“Ex-ship” – the basic delivery terms, under which the seller makes the goods available to the buyer on board a ship at the named port of destination. The seller must bear all costs and risks associated in bringing the goods to the named port of destination. The buyer must clear the goods through customs and is responsible for all costs and risks upon receipt of the goods from the seller.