South Korea's state-owned Korea Gas Corp. will press ahead with a long-delayed attempt this year to sell part of its 15% stake in LNG Canada, a company official said Tuesday.
Kogas aimed to sell the stake by the end of last year, but the plan has been delayed due to falls in the price of natural gas and some delays to the LNG Canada project, a company official said.
However, Kogas will continue the plan to sell the stake this year as part of its efforts to improve its finances, he said.
The official declined to disclose how much the company would sell, but most likely 5% because Kogas has said it would sell half of its previously held 20% stake.
Kogas currently holds a 15% interest in Shell-led LNG Canada after selling a 5% stake for C$30 million to Shell in May 2014.
The state utility originally attempted to sell additional 5% stake by the end of 2014 but failed because of the slump in energy prices.
Kogas has said it would like to sell the stake in LNG Canada to private South Korean companies in a bid to keep the country's stake in the project unchanged at 15%, and would propose forming a fund with local investors for the stake transfer.
Kogas and its partners launched LNG Canada, a project to produce 12 million mt/year of LNG from two trains at Kitimat in the western province of British Columbia, in May 2013.
Shell holds a 50% stake in the project, China's CNPC has 20% and Japan's Mitsubishi has a 15% stake.
Kogas also plans to sell a 47% stake in its 100%-controlled Akkas gas field in Iraq to further improve its finances.
Kogas is under pressure from the government to reduce its debt, which has grown after massive overseas projects in the past few years.
The government has called for Kogas to lower its debt-to-equity ratio to 274% by 2017 from 389% in 2013, through asset sales and the reshuffling of its business portfolio.
Its debt-to-equity ratio also fell to 324.8% at end-September this year, from 381.0% at the end of 2014.
Kogas is owned 54.55% by the state -- 26.15% by the central government, 20.47% by state power monopoly Korea Electric Power Corp. and 7.93% by local governments.
