Regional LNG: S. Korea LNG demand seen to increase by 9.2% in 2004: Report

Energy demand in South Korea, the world's fourth-biggest oil buyer, is forecast to grow by a faster five percent in 2004 as the economy recovers, the Korea Energy Economics Institute (KEEI) reported on Friday.

"As the economy is expected to recover next year, energy demand growth is seen much better than this year," Kim Young-duk, a KEEI analyst, told Reuters.

Total demand -- including oil, natural gas, coal and nuclear energy -- is expected to grow to 225.5 million tons of oil equivalent next year, faster than an estimated 2.9 percent rise this year, the state-funded think tank said in a report.

The forecast is based on the assumption of 4.8 percent growth in the economy, Asia's fourth largest, in 2004 against an estimated gross domestic product gain of 2.6 percent in 2003, it said.

The KEEI report said oil consumption was likely to grow 2.5 percent to 777.5 million barrels next year against a 0.6 percent contraction this year. However, the share of oil in the country's total energy mix may continue to shrink due to relatively high global oil prices and environmental regulations, KEEI said.

Oil's share has been steadily falling since 1998, from 54.6 percent to 49.1 percent in 2002 and 47.4 percent in 2003. It is likely to drop to 46.2 percent next year, KEEI said.

Demand for liquefied natural gas (LNG) was set to grow 9.2 percent to 21.4 million tons next year versus 10.4 percent this year, it said. The share of LNG is likely to increase to 12.3 percent next year from 11.9 percent this year.

Other major sources include coal, which currently takes up 23.8 percent of the total energy mix, and nuclear energy with a 14.8 percent share, he added.

Energy-deficient South Korea, which imports all of its crude oil and natural gas, is the world's second-largest LNG buyer. (*)