Energy giant Shell is said to be on the verge of signing a multibillion-dollar deal that will have Australia supplying a huge chunk of South Koreas liquefied natural gas needs.

State-owned Korea Gas Corporation has announced it will buy 3.64 million tonnes of LNG annually from Australia for 20 years starting 2017.

Thats when Shell is scheduled to begin producing gas from its Prelude project, labelled the worlds first floating LNG facility, to be based off the WA coast.

The deal is expected to be signed in September, when Kogas is also due to formalise an agreement with French company Total to buy two million tonnes of LNG annually between 2014 and 2031.

Together the two deals are believed to be worth about $80 billion and will eventually provide about 17 per cent of South Koreas total LNG needs.

Kogas is the worlds second biggest buyer of LNG.

source: APEC-VC Korea