Seoul — South Korean state-owned Korea Gas Corp.'s LNG sales in December rose 7.7% from a year earlier on stronger demand for power production with the shut down of dozens of coal-fire power plants to help reduce winter air pollution.
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The state utility's LNG sales are expected to keep rising in January when the country was hit by the week-long cold spell, which marked the worst in decades, a Kogas official said Jan. 14.
Kogas, which has a monopoly in domestic natural gas sales, sold 4.536 million mt last month, compared with 4.212 million mt a year earlier. The December sales were up 49.1% from 3.042 million mt in November.
Kogas did not disclose how much LNG it sold for the whole 2020 year, but S&P Global Platts calculations based on Kogas' previous reports showed it sold 32.367 million mt over January-December, down 3.7% from a year earlier.
The sales for the full 2020 year mark the second consecutive decline as Kogas sold 33.597 million mt in 2019, down 7.2% from 36.219 million mt in 2018, which was up 12.6% from 32.16 million mt in 2017.
Kogas' LNG sales have decreased throughout since January 2019, except just five months including December.
Of the state utility's total LNG sales in December, purchases by power generators rose 4.6% year on year to 1.803 million, compared with 1.724 million mt a year earlier.
Sales to retail gas companies for households and businesses also climbed 9.8% year on year to 2.733 mt in December.
The country's average temperature in December was 0.7 degrees Celsius, lower than usual 1.5 degree, according to the Korea Meteorological Administration.
The country shut 13 to 16 coal-fired power plants in December, out of its 60 coal power plants in total to help reduce winter air pollution. All the other plants operated at around 40% of their capacity.
The country has planned to shut 9 to 16 coal-fired power plants for three months since Dec. 1 out of its 60 coal power plants, with all of the other coal power plants operating at not more than 80% capacity from December to February.
In addition, five nuclear reactors with a combined capacity of 5,400 MW, or 13.2% of South Korea's overall combined nuclear power capacity of 23,250 MW from 24 nuclear power plants, were offline in December for maintenance.
Kogas LNG sales are expected to keep rising in January as the Seoul metropolitan area, home to the country's 52 million population, was gripped for a week in January by the worst cold spell in 35 years, which boosted South Korea's electricity demand jumping to a wintertime high.
"The government will be fully prepared to cope with a spike in electricity demand by operating more LNG-fired power plants," said an official at the Ministry of Trade, Industry and Energy.
Coal-fired power plants and nuclear reactors owned by state utilities have been usually operated at full capacity because they are "base-load" generators due to lower costs as a means to minimize power production costs.
With increasing demand, power plants are using more expensive fuel of natural gas to increase electricity production.
Kogas LNG sales in 2020:
Unit: '000 mt
Kogas LNG sales in 2019:
Unit: '000 mt