More Use of Natural Gas
On Dec. 28, the Ministry of Trade, Industry & Energy released its 12th long-term plan for natural gas procurement for the period of 2015 to 2029. According to the plan, the Korean government will invest 7.1 trillion won for 15 years in order to build more city gas supply infrastructure while diversifying natural gas supply sources.
Korea’s total LNG use for city gas supply, power generation and the like is estimated to decrease by 0.34 percent a year until 2029. Specifically, that related to city gas supply is expected to increase 2.06 percent on an annual average basis, while that for power generation is predicted to fall 4.17 percent to result in lower demand. In the meantime, natural gas power plants are to take the place of the decommissioned first unit of the Kori Nuclear Power Plant and the seventh and eighth units of the coal-fired power plant in Yeongheung, which was canceled in the planning phase.
The destination clause that limits the destination to Korea is to be relaxed or removed, too. In this context, natural gas imported from the United States until 2037, amounting to 2.8 million tons a year, becomes free from the clause, and the ministry is planning to expand the deregulation to gas import contracts with other countries as well. Furthermore, the U.S., Iran and other countries have been added as the sources of procurement, which increases the source from 7 to 11 by 2029.
Gas storage facilities with 10 storage tanks are slated to be built, which will establish Korea as an LNG hub of Northeast Asia. When the construction is completed, the storage capacity will increase from 9.825 kl to 15.235 kl. In addition, the number of wharfs for natural gas carriers is to be increased by one to eight.