INTERVIEW: Kogas To Hedge 100% Of LNG Import Settlements Worth $22Bln Via Forwards

State-run Korea Gas Corp. (036460.SE), the world's largest corporate buyer of liquefied natural gas, plans to continue to fully hedge its LNG import exposure, worth around $22 billion, by buying dollar forwards this year so it doesn't suffer from foreign exchange fluctuations, an executive at the company said Friday.

The state-run gas developer and supplier, also called Kogas, has a basic policy of hedging all its LNG exposure.

Kogas has a business plan for the year that's based on a foreign exchange rate of KRW1,050 to the dollar and oil prices of US$100 per barrel, Kim Hee-tae, the head of the company's finance department told Dow Jones Newswires in an emailed interview. The dollar was at KRW1,125.80 in late Asian trade Friday.

Kim didn't specify what type of oil price he was referring to. South Korea relies mostly on Dubai crude for domestic demands. Dubai crude was trading around $120 Thursday. Kogas is one of the biggest importers of LNG globally because South Korea relies heavily on overseas resources for its energy needs. As of end-2011, South Korea's oil-and-gas self-sufficiency ratio, which measures the ratio of resources owned by domestic firms to imports, was at 13.7%. For funding its overseas resource development projects, the company will first use corporate funds and sell foreign-currency denominated bonds to raise funds and will borrow in foreign currencies if it has to, he said.

Last month, another Kogas executive said the company plans to invest about $3 billion this year in overseas resources, with investment mostly directed towards LNG projects.

Kogas is mulling sales of various bonds, including global bonds, maple bonds, samurai bonds and Swiss-franc bonds, Kim added.

Analysts expect Kogas to continue to become a more active participant in global bond market as it seeks to expand resource development overseas. In January, Kogas raised around US$750 million from the sale of a 30-year dollar-denominated global bond to finance overseas resource projects.

Key overseas projects Kogas is participating in include the multi-billion Akkas gas field development in Iraq in which it is the major stakeholder and the Gladstone LNG project, in Queensland state. It also said last year it will participate in the Prelude gas development project in Australia through a stake investment.