S.Korea sees natural gas demand growing to over 40 mln T by 2031
South Korea expects its natural gas demand to rise to over 40 million tonnes in 2031, driven by higher household and industrial consumption of the fuel, the energy ministry said on Thursday.
The world’s third-largest liquefied natural gas (LNG) importer had previously forecast natural gas demand falling to 34.65 million tonnes of LNG equivalent in 2029 from 36.49 million tonnes in 2014 due to lower power generation demand.
The increased demand forecast of 40.49 million tonnes of LNG in 2031 from estimated 36.46 million tonnes in 2018 comes as South Korea shifts away from coal and nuclear fuel.
The country has long been reliant on coal and nuclear power to produce electricity. The share of gas-fired power generation made up about 17 percent of the country’s total electricity needs in 2017 and is estimated to increase to 18.8 percent by 2030.
Reflecting the country’s growing gas demand over the next 13 years, South Korea also plans to spend about 5.8 trillion Korean won ($5.48 billion) by 2031 on expanding its gas supply infrastructure including storage tanks and pipelines.
Household and industrial consumption of LNG is expected to grow by 1.24 percent annually to 23.40 million tonnes in 2031 from 19.94 million tonnes in 2018. For power generation, it is expected to increase to 17.09 million tonnes of LNG in 2031 from 16.52 million tonnes in 2018.
To ensure gas supply security, South Korea also seeks to diversify gas supplies and have more flexible LNG contracts that do not include restrictive destination clauses or take-or-pay terms.
Most of the long-term LNG contracts include the destination clauses that prevent buyers from reselling excess cargoes to other markets, and Asian LNG buyers have been vocal about the removal of the restrictive clauses.
“We plan to have more flexibility in mid-and-long term contracts through cooperation with major LNG buyers,” the ministry said in its long-term natural gas supply-demand report for 2018-2031.
South Korea imports most of its LNG through the country’s sole LNG wholesaler Korea Gas Corp. Last year, South Korea imported 37.55 million tonnes of LNG, mainly from Qatar and Australia.
Source: Reuters (Reporting By Jane Chung; Editing by Amrutha Gayathri)