South Korean state-owned Korea Gas Corp.'s LNG sales jumped 41.9% year on year in May, driven by post-pandemic economic recovery and the shutdown of some nuclear reactors, a company official said June 18.
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Kogas, which has a monopoly in domestic natural gas sales, sold 2.315 million mt of LNG in May, surging from 1.632 million mt a year earlier.
It marks the biggest increase in 11 years since LNG sales jumped 49.8% year on year April 2010, according to data compiled by S&P Global Platts. It also marks the sixth consecutive year-on-year monthly increase since last December.
But the May sales were down 16.4% from April due to the off-peak season. Kogas's LNG sales in January were the highest on record at 4.947 million mt.
Kogas did not disclose how much LNG it sold over January-May, but Platts calculations based on Kogas' previous reports showed it sold 17.205 million mt over the five-month period, up 16.2% year on year.
Of the utility's total LNG sales in May, purchases by power generators surged 79.1% year on year to 1.168 million mt and to retail gas companies for households and businesses rose 17% to 1.147 million mt.
Kogas attributed the year-on-year rises in LNG sales in both April and May to the low sales a year earlier due to the emergence of the coronavirus pandemic.
In May 2020, Kogas' LNG sales were down 24.1% on year at 1.632 million mt, the biggest decline in more than 10 years.
"The rises in May and April this year were also driven by post-pandemic economic recovery," the company official said.
The country's central Bank of Korea on May 27 sharply raised its 2021 growth outlook to 4%, from a 3% growth projection made in February, on the back of robust exports and strong facilities investment.
The rise in LNG demand for power production was also boosted by the shutdown of more nuclear reactors in May for maintenance.
Seven nuclear reactors with a combined capacity of 7.4 GW were offline for maintenance or malfunction in the month, comprising 31.8% of the country's overall capacity of 23.25 GW across 24 nuclear reactors. This was up from the shutdown of five reactors with a capacity of 4.95 GW over January-March.
South Korea's LNG demand for power production is expected to remain strong in coming months after a fire shut of the country's newest and biggest nuclear reactor, the 1.4 GW Shin Kori-4, on May 29. The outage is expected to last for around a month, according to state-owned nuclear operator Korea Hydro and Nuclear Power.
The Shin Kori-4 shutdown will reduce the country's nuclear availability and raise LNG demand for power production during the peak summer demand season.
The energy ministry said the country will be ready to raise the operating ratio of natural gas-fired power plants to avoid any electricity supply disruptions, which could further boost LNG demand.
To meet steadily growing LNG demand, South Korea increased LNG imports by 8.5% year on year to 20.032 million mt over January-May, according to customs data. The world's third-biggest LNG buyer imported 39.98 million mt of LNG in 2020, slipping 1.9% from 40.75 million mt in 2019.
Kogas' LNG sales in 2021 to date:
(Unit: '000 mt)
Source: Korea Gas Corp.