South Korea eyes fresh LNG term contracts : Report
Tuesday, September 3 2002 - 11:55 PM WIB
South Korea, which imports all of its crude and natural gas requirements, is one of the world's top LNG importers.
"The (energy) minister has recently ordered (the ministry) to put new contracts under consideration," the official told Reuters.
Industry experts have pressed for new term LNG contracts to safeguard supplies, citing fast-growing demand, but the government has been reluctant as it hoped to grant contract rights to new firms.
Under a broader public sector reform drive, Seoul plans to split the import and wholesale division of state-run Korea Gas Corp (KOGAS) , the country's sole LNG importer, into three entities and sell two of them by the end of this year.
But laws enabling the break-up still require parliamentary approval after they were rejected in December last year.
"Because it (the break-up) is likely to be delayed as the laws have not yet passed up until now. It means the break-up is not likely within this year," the official said.
He declined to comment on how fast demand would surpass supply and the quantity of new LNG imports needed.
By 2015, South Korea's LNG demand is projected to jump 81 percent to 28.24 million tonnes per year, from 2001 levels of 15.59 million tonnes, according to an energy ministry draft report.
Analysts forecast LNG demand to exceed supply by far more than 850,000 tonnes a year from 2004.
Korea Gas Corp imports 16.9 million tonnes of LNG every year under long-term supply contracts with Indonesia, Malaysia, Oman, Brunei and Qatar.
A 20-year supply contract with Indonesia, the largest LNG supplier to South Korea, expires in 2007. The other existing contracts expire after 2013.(*)