Commodity trading giant Trafigura has entered into a long-term supply purchase agreement (SPA) to deliver liquefied natural gas (LNG) to South Korean state-run importer Kogas, the firm announced on 25 August.
Under the agreement, Trafigura is expected to supply around 700,000 tonnes of LNG per year, traders said, although the precise volume remains undisclosed. Market sources added that the deal was signed at around 120–121% of the US Henry Hub benchmark, with a fixed component estimated at $4.20/mn Btu.
Trafigura said supplies to Kogas “over the next decade” will be sourced from its global LNG portfolio, including offtake agreements with producers such as US exporter Cheniere Energy.
The deal will help Kogas diversify its LNG import channels and strengthen South Korea’s long-term energy security, the company’s chief executive, Yeonhye Choi, noted.
In addition, Kogas is reported to be close to sealing separate SPAs with TotalEnergies and BP, each for around 1mn tonnes per year of LNG. Traders indicated TotalEnergies’ final offer was on a delivered ex-ship (DES) basis at about 119% of Henry Hub with a $4/mn Btu constant. In comparison, BP’s proposal was said to be DES-linked at roughly the low-to-mid 11% range of Brent.
The competitive terms reflect the flexibility Kogas offers to its suppliers, traders explained. With multiple LNG terminals and storage facilities across South Korea, and its ability to procure in large volumes, Kogas can provide more favourable contract structures.
These agreements are understood to stem from a term LNG tender Kogas launched in May 2024, according to market participants.
