Korea Gas Corp., or Kogas, said Thursday that it
will go ahead with the development of one of Iraq's
largest gas fields despite the recent withdrawal of its foreign partner in the
project.
The Korean state-run gas company's decision comes at a time of increasing
interest by South Korean companies in business opportunities in war-ravaged Iraq,
including in its huge upstream resources sector and in major infrastructure and
power projects.
After the withdrawal of Kazakhstan's state gas company KazMunaiGas EP JSC from
the gas project earlier this month, Kogas has decided to double its share,
taking over KazMunaiGas's stake, Kogas said in a regulatory filing.
Kogas will now have a 75% stake in the Akkas gas venture, up from 37.5%
previously, with Iraq's
state-run North Oil Company holding the other 25%.
The company plans to invest an estimated $2.66 billion in the Akkas project
over a 20-year period, said a company official, who declined to be named. But
that estimate is based on an assumption that Kogas keeps the entire 75% stake
in the project, he said.
After a final signing of the contract with Iraq
takes place, expected next month, Kogas may find a new partner to help develop
the 3.3-trillion-cubic-foot gas field, Kogas said in its filing.
"Multiple foreign companies have approached" Kogas to express an
interest in joining the Akkas project and Kogas is "strongly
determined" to seek a new partner, Yoo Jeong-Don, general manager for the
state-run utility's Iraq
project group, said earlier Thursday.
The signing of the contract had been delayed twice since KazMunaiGas and Kogas
won the right to develop the gas field last year, due to disputes with
provincial authorities in Anbar province, where the field is located.
In April, Iraqi Prime Minister Nouri al-Maliki visited Seoul, and agreed with
South Korean President Lee Myung-bak that the two countries should cooperate
more closely in developing Iraqi oil and gas reserves and in reconstruction
efforts.
One agreement signed during the visit was for South Korea to have the priority
right to at least 250,000 barrels a day of crude oil during any emergency that
upsets the global supply-demand balance, equivalent to about 10% of South
Korean daily crude imports.
Other South Korean companies aiming for big contracts in Iraq
include Hanwha Engineering & Construction Corp. and Hyundai Heavy Industries
Co. Ltd. (009540.SE).
Hanwha Engineering Thursday said it signed a preliminary agreement for a $7.25
billion construction project to build a new town in Iraq.
Iraq's
electricity minister said April 7 that a consortium of South Korean companies,
including Hyundai Heavy, had agreed to build multiple power plants with a total
output capacity of 2,500 megawatts, in a deal worth $3.12 billion.
In January, Iraq
announced that South Korea's Hyundai Engineering & Construction had won a
contract worth $218.9 million to build a 500 MW power station near the capital
Baghdad, which would use turbines supplied by General Electric Co.