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Executive Summary:
Korea retains several high energy intensive industries, and given its lack of sufficient natural resources, the country relies heavily on imported energy sources to meet
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Current Market Needs:
Korea has outlined goals for increased LNG and natural gas supply via national goals and plans, including the ‘8th Basic Plan for Long-term Electricity Supply and Demand (2017-2031)’ and the ‘13th Long-term Natural Gas Supply and Demand Plan (2018-2031).’ The 8th Plan articulated Korea’s endeavor to gradually move away from nuclear and coal as source of power and rely more on cleaner and safer sources of energy, such as LNG and renewables. LNG power generation capacity would increase:
Ministry of Trade, Industry and Energy (MOTIE) [in English] http://english.motie.go.kr/en/tp/energy/bbs/bbsView.do?bbs_seq_n=605&bbs_cd_n=2&view_type_v=TOPIC&¤tPage=1&search_key_n=&search_val_v=&cate_n=3
Ministry of Trade, Industry and Energy (MOTIE) [in Korean] http://www.motie.go.kr/motie/ne/presse/press2/bbs/bbsView.do?bbs_cd_n=81&bbs_seq_n=160317
Read about the information in this chart on this site: http://english.motie.go.kr/en/tp/energy/bbs/bbsView.do?bbs_seq_n=605&bbs_cd_n=2&view_type_v=TOPIC&¤tPage=1&search_key_n=&search_val_v=&cate_n=3
Graph: Power Generation Capacity, by Fuel Source, Unit: share % 
Guidance on future LNG demand and so forth is anticipated to be covered in the much-delayed release of the ‘9th Basic Plan for Long-Term Electricity Supply and Demand.’
[Table: Long-term Natural Gas Demand Forecast, Unit: 10,000 tons]
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Recent Market Trends:
As of year-end 2019, the top LNG suppliers to Korea include Qatar, Australia, the United States and Malaysia, which represented approximately 70 percent of the market. Korea is one of the largest LNG importers in the world and is also considered one of the largest destinations for U.S. LNG exports.
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Competitive Landscape:
Please refer to the following table, with regards to Korea’s LNG import sources by region.
Table: LNG Imports, by Region Breakdown, Unit: tons
Country
2019
Qatar
11,311,064
Australia
7,775,214
United States
5,225,744
Malaysia
4,801,917
Oman
3,945,586
Indonesia
2,335,885
Russia
2,247,086
Others
3,105,814
Total
40,748,310
Source: Korea International Trade Association (KITA), K-stat http://stat.kita.net/
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Best Prospects for U.S. Exporters:
As shown in the LNG flow diagram below, for qualified U.S. LNG export projects, the best prospects would be for preferred suppliers of LNG to meet Korea’s energy fuel needs for city gas and power generation.
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Market Entry:
It is extremely important to establish rapport and dialogue with Korean LNG stakeholders. As one of the world’s largest buyers of LNG, the Korea Gas Corporation (KOGAS) imports about 90 percent of Korea’s LNG and retains a monopoly in the domestic wholesale market, with customers that include both the power generation and city gas companies. Moreover, it owns and operates most of the nationwide pipeline network and storage tanks in Korea. As indicated in the country’s long-term natural gas plan, Korea seeks to secure more flexibility in LNG contracts via easing destination
Table: KOGAS’ LNG Terminal & Pipeline Infrastructure, Capacity Unit: million tons
Incheon
Pyeongtaek
Tongyeong
Samcheok
Total
Start-up
Oct. ‘96
Nov. ‘86
Sep. ‘02
Jul. ‘14
-
No. of Tanks
20
23
17
12
72
Pipeline
4,908 km-long pipeline network operated by approx. 411 stations
A few power generation companies, such as SK E&S and Korea Midland Power (KOMIPO), directly import LNG, but only for their own respective use. Originally established as a holding company for its city gas business, SK E&S has diversified and expanded their business portfolio into power generation, district energy, renewables, and LNG. Likewise, KOMIPO, a wholly-owned subsidiary of utility giant Korea Electric Power Corporation (KEPCO), is primarily engaged in the operation of thermal power plants and renewable energy facilities.
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Technical Barriers & Tariffs:
There are no tariffs on U.S. LNG.
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Procurement & Tenders:
There is no official public tender. LNG contract discussions and/or negotiations are normally conducted company-to-company, due to the vast differences of the structure of agreements, nature of projects, and the confidential nature of discussions.
Table: KOGAS’ LNG Terminal & Pipeline Infrastructure, Capacity Unit: million tons
Incheon
Pyeongtaek
Tongyeong
Samcheok
Total
Start-up
Oct. ‘96
Nov. ‘86
Sep. ‘02
Jul. ‘14
-
No. of Tanks
20
23
17
12
72
Pipeline
4,908 km-long pipeline network operated by approx. 411 stations
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Upcoming Trade Events:
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U.S. Commercial Service Information:
Name: Daniel Lew, Commercial Officer Daniel.Lew@trade.gov
Name: SB Shin, Commercial Specialist sb.shin@trade.gov
