South Korea to liberalise LNG imports in 2025

The South Korean government plans to allow third parties to import their own LNG independent of current monopoly distributor KOGAS starting in 2025, according to a government statement released on Tuesday, 14 June.

The move comes amid a major restructuring of the country’s energy sector announced by the Ministry of Strategy and Finance. The overall change will downplay coal development and allow more private investment in the energy sector.

KOGAS has imported nearly all of the LNG entering South Korea since it was established by the government in 1983. Last year it imported 31.5m tonnes of LNG, about 94% of the country’s total.

Overall, South Korea imported 33.4m tonnes of LNG in 2015, down 10% from the year before and the second consecutive year of declining volumes. LNG use is falling amid an increase in nuclear power output and a moribund industrial sector.

Private companies such as SK E&S and POSCO can also import LNG, but only for their own use and only if they could buy at a price below KOGAS’ long-term contract. Regional state-owned electricity producer Korea Midland Power (KOMIPO) also regularly imports small volumes of LNG for its power generation.

Starting in 2025, these companies will be able to make their own LNG imports completely independent of KOGAS, according to the government statement.

SK E&S and GS Energy have already taken steps to increase their imports. The two companies plan to start commercial operations later this year at the newly constructed Boryeong terminal.

Also in the government’s plan, Korea Coal Corp will be made smaller and state-owned electricity distributor Korea Electric Power Corp will sell off its overseas holdings and focus on large-scale domestic power projects. Five other state-owned power generation companies will move their focus to renewable energy, according to the policy statement. ben.lefebvre@icis.com