TotalEnergies has signed a heads of agreement (HoA) with HD Hyundai Chemical for the delivery of 200,000 tonnes per annum (tpa) of LNG from 2027 to 2033.

The LNG will be delivered from TotalEnergies’ production facilities in Australia and Oman to one of HD Hyundai Chemical’s industrial sites in South Korea, said a joint statement on Tuesday.

With prices indexed both to Brent and Henry Hub, the deal enables TotalEnergies to strengthen its long-term position in South Korea, where the company already has solar, wind and petroleum ventures.

TotalEnergies senior vice-president of LNG Gregory Joffroy said: “This agreement allows us to continue securing long-term sales in Asia and reduce our exposure to spot market gas prices.”

TotalEnergies had a global LNG portfolio of 44 million tons per annum (mtpa) in 2023 from interests in liquefaction plants, including access to more than 20mtpa of regasification capacity in Europe.

With its integrated position across the LNG value chain, the company aims to increase the share of natural gas in its sales mix to close to 50% by 2030.

In September, TotalEnergies entered a ten-year contract with Turkish energy company BOTAŞ for the purchase of LNG from 2027 and extended its LNG supply deal with China National Offshore Oil Corporation to 2034.

While South Korea is the world’s third-largest LNG-importing country behind China and Japan, research from the Institute for Energy Economics and Financial Analysis revealed a growing disparity between LNG import infrastructure and demand in the nation.

South Korea’s LNG imports declined from 12% in 2022 to 4.9% in 2023. The country intends to diversify its LNG import sources to reduce the risk of supply disruptions caused by regional conflicts and production issues, as per the International Energy Agency.

HD Hyundai Chemical was established in 2014 from a strategic joint venture between Korean conglomerates HD Hyundai Oilbank and Lotte Chemical.