Import Not Necessary
The Korean government is mulling over allowing the Korea Gas Corporation to sell the natural gas it produces abroad without importing it to Korea.
“Natural gas not subject to the destination clause is to be imported to Korea from next year,” the Ministry of Trade, Industry & Energy said on Oct. 21, adding, “We are examining a revision of the rules so that it can be sold abroad if doing so leads to more profits.”
The destination clause is a contract term compelling 100 percent of produced natural gas to be consumed in Korea. It is specified in every natural gas import contract signed with Qatar, Oman, Indonesia, and other countries. However, the clause was not applied to the contracts signed with Australia in 2010 and the United States in 2012. According to the contracts, 3.5 million tons of natural gas per year are scheduled to be imported to Korea from Australia from 2016, and 2.8 million tons per year from the United State from 2017.
“In fact, direct overseas sales are not prohibited as of now, but it requires government approval on a case-by-case basis, which resulted in difficulties in coping with market situations in a prompt way,” the ministry remarked, continuing, “What we are planning on is to allow a single approval to cover overseas sales within 20 percent of the annual import.”