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South Korea to Rely on Spot LNG Market Against Global Trend

LNG

State-owned Korea Gas Corp. plans to rely on short-term deals or spot purchases to meet supply needs amid high prices according to Bloomberg citing the energy ministry.

  • Reliance on the spot market is counter to the global trend toward long-term agreements on LNG and would exposed South Korea to the volatile spot market. Japan is urging importers to secure in long-term deals to ease security of supply risks.
  • Kogas is expected to see a supply shortfall of almost 5.5m tons beginning in 2025 due to the expiry of existing long-term contracts from Qatar and Oman which account for 20% of the country’s annual consumption.
  • The expected shortfall is despite two long-term contracts with Qatar and BP Plc from 2025 with a combined annual volume of 3.58m tons.
  • LNG demand in South Korea is expected to decline amid clean energy targets and the rise in private importers also reduces the need for long-term LNG deals, according to a company spokesman.

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