South Korea Liquid Natural Gas Market
South Korea is emerging as a key long-term buyer of U.S. liquefied natural gas (LNG), opening opportunities for U.S. exporters to supply one of the world’s most energy-dependent markets. Recent contracts position the United States as Korea’s second-largest LNG supplier, surpassing Qatar and Malaysia, and offer more flexible and competitive terms than traditional Middle Eastern arrangements.
Korea’s LNG market is undergoing a significant shift as Korea Gas Corporation (KOGAS) recently signed long-term contracts with global commodity trade firms, including Trafigura, Total Energy, and Qatar Energy to secure 4.3million tons – with 3.3 million purchased from Trafigura and additional 1 million tons from Total Energy. A country that is heavily dependent on energy imports, Korea will source U.S.-origin LNG for a ten-year period starting in October 2027. Amid these agreements, Korea’s total U.S. LNG imports are projected to reach approximately 7 to 9 million tons per year, making the United States, Korea’s second-largest LNG source after Australia (7 million tons), and surpassing Qatar (6.1 million tons) and Malaysia (5 million tons).
The deal delivers highly competitive pricing, notably lower than the national average of $632 per ton (CIF) and more attractive than most traditional LNG partners. Importantly, these new contracts are portfolio-based rather than previously more restrictive arrangements of Middle Eastern origin, which limited cargo destinations and imposed re-export bans. As a result, Korean LNG importers can now source from a broader range of suppliers with more flexibility in resale options. Such diversifications of LNG sources with flexible contract terms also allow KOGAS to adopt new customized pricing mechanisms and enable individual power generation companies (GENCOs) in Korea to negotiate individual gas tariffs (IGT). This in turn will provide power generators with more options and strengthen KOGAS’s ability to compete against growing volumes of direct LNG imports by private firms.
Opportunities for U.S. LNG Suppliers and Exporters
While Korea’s long-term energy strategy envisions reduced fossil fuel use, LNG remains essential to balance unpredictable renewable output and manage supply-demand gaps. KOGAS and private LNG import companies are expanding their capabilities beyond simply importing LNG to more sophisticated management of their LNG portfolios. This includes developing their expertise in scheduling, transportation, stockpiling, and applying advanced market price and supply-demand analysis. Such expanded capabilities will also allow them to mitigate exposure to price volatility, supply disruptions, and other potential risks. U.S. companies offering flexible LNG sales and purchase agreement (SPA) conditions and portfolio management solutions will be well positioned to secure LNG export business in Korea’s evolving marketplace.
Korean LNG buyers are also seeking contracts that will assist them in reducing supply risks. Diversification of LNG sources will offer flexibility in contract volumes and scheduling, provide more competitive prices, and offer fewer restrictions related to delivery destination issues. Thus, U.S. LNG exporters should prioritize flexible portfolio-based supply arrangements with value-added services such as real-time logistics and storage solutions, offer competitive pricing that align with Korea’s evolving energy demand.
For more information on U.S.–Korea LNG trade, market access strategies, or opportunities to connect with Korean buyers, please contact the local U.S. Commercial Service office near you https://www.trade.gov/commercial-service-offices-us and/or the U.S. Commercial Service Korea: Nathan Huh, Senior Commercial Specialist, Nathan.Huh@trade.gov for a consultation.