South Korea’s state-run Korea Gas said Monday that it will start importing US shale gas in July.
Following a deal secured in 2012 with the Texas-based Cheniere to bring in shale gas, Korea has become the first nation in Asia to import US shale gas.
From this year, Kogas will bring in 2.8 million tons of US shale gas annually for the next 20 years. Throughout 2017, the company will import some 1.5 million tons, which will allow Korea’s annual import shipments of natural gas to reach 36 million tons.
Of the total 36 million tons, Kogas will be responsible for bringing in some 32 million tons, while private businesses will be responsible for around 3.7 million tons, the company said.
Korea has been dependent on countries in the Middle East, including Qatar and Oman, for its gas supply.
Following a deal secured in 2012 with the Texas-based Cheniere to bring in shale gas, Korea has become the first nation in Asia to import US shale gas.
From this year, Kogas will bring in 2.8 million tons of US shale gas annually for the next 20 years. Throughout 2017, the company will import some 1.5 million tons, which will allow Korea’s annual import shipments of natural gas to reach 36 million tons.
Of the total 36 million tons, Kogas will be responsible for bringing in some 32 million tons, while private businesses will be responsible for around 3.7 million tons, the company said.
Korea has been dependent on countries in the Middle East, including Qatar and Oman, for its gas supply.
Kogas may increase imports of US shale gas down the road, if it remains competitive in the market in terms of price, the company said. It could also benefit from the reselling of US shale gas to a third country if supply overflows, though it cannot do so with gas from the Middle East under the contract’s conditions.
“Under the current circumstances, the overall imported amount of natural gas is expected to increase in the future, on the back of the new administration’s energy policy,” a Kogas spokesperson said.
The Moon Jae-in government is set to announce plans for long-term electricity supply and demand later this year, upon which the amount of natural gas to be imported by the country will become clearer, the official added.
The latest import is also expected to ease concerns raised by US President Donald Trump on an alleged trade deficit.
Moon and Trump will be holding their first summit talks this week in Washington, with the South Korean president accompanied by a 52-strong business delegation.
Chey Tae-won and Huh Chang-soo, chairmen of the nation’s largest natural gas importers SK Group and GS Caltex, will be among the delegation, along with Kogas President Lee Seung-hoon.
The US shale gas, meanwhile, will be transported next month by six liquefied natural gas carriers operated by three domestic shipping companies, SK Shipping, Korea Line and Hyundai LNG Shipping. Two if the LNG vessels were built by Samsung Heavy Industries, while the remaining four were built by Daewoo Shipbuilding and Marine Engineering, according to Kogas.
By Shim Woo-hyun (ws@heraldcorp.com)
