South Korean state-owned Korea Gas Corp.'s LNG imports rose 11.7% year on year to 24.43 million mt in the first nine months of 2017, a company official said Friday.
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The increased LNG intake comes as the country's domestic LNG demand is expected to increase on the back of new President Moon Jae-In's push for raising power production by LNG, so as to reduce heavy reliance on coal and nuclear in electricity generation.
The company did not disclose how much it imported in the third quarter alone. But given its first-half imports of 17.85 million mt, the company would have imported 6.57 million mt over July-September, up 13.3% year on year.
Kogas, one of the world's biggest LNG buyers, imported a total of 31.85 million mt last year, up 1.4% from 2015, which marks the first annual increase in three years driven by unstable operation of nuclear reactors.
The state utility said most of its LNG imports over January-September came under 15 long-term contracts worth 32.22 million mt/year, down from 33.32-34.32 million mt a year earlier.
Kogas has term contracts for 9.02 million mt/year from Qatar; 4 million mt/year from Malaysia; 4 million mt/year from Oman; 3.5 million mt/year from Australia; 2 million mt/year from Yemen, 1.7 million mt/year from Indonesia; 1.5 million mt/year from Russia's Sakhalin and 1 million mt/year from Brunei, among others, the company official said.
Kogas has started to import 2.8 million mt/year from the Sabine Pass terminal in Louisiana since June 2017 under a 20-year contract. The increased LNG imports come while Kogas' sales of the fuel has been on the decline. The state utility, which has a monopoly on domestic natural gas sales, sold 22.42 million mt over January-September, down 3% year on year, the company official said.
Of the total for the first nine months, LNG sales to retail gas companies for households and businesses climbed 2.9% year on year to 12.60 million mt.
But LNG sales to power generators fell 9.6% year on year to 9.82 million mt over January-September.
"The decline in LNG sales to power generators was attributable to the start of production at a new coal-fired power plant," the Kogas official said.
A mammoth coal-fired power plant with 1,022 MW capacity started commercial production in December last year, according to Korea Southern Power, or Kospo, that is run by state-run electricity monopoly Korea Electric Power Corporation, or Kepco. The decline was also due to the restart of four nuclear reactors shut for three months from September 12 last year, following a major earthquake. The Kogas official said the company can hold possible surplus imports as it has expanded its storage tanks. In June, Kogas started commercial operations at three giant gas storage tanks, each with a capacity of 270,000 kiloliters. Kogas' LNG terminal in Samcheok, on the country's east coast, is the world's biggest natural gas storage facility, according to the company.
Kogas plans to build its fifth LNG storage terminal with a capacity of 2 million kiloliters by 2031 on the country's west coast. The terminal will have 10 tanks, each 200,000 kiloliters, in Dangjin, south of Seoul.
Kogas runs three other LNG terminals at Pyeongtaek, Incheon and Tongyeong.
The energy plan by President Moon, who took office in May, calls for the country to increase the portion of LNG in power generation to 37% in 2030 from 20% currently, in order to reduce reliance on nuclear reactors and coal-fired power plants.
Despite the 3% decline in LNG sales for the first nine months, Kogas' revenue climbed up 4.7% year on year to Won 15.6 trillion ($14.2 billion) over January-September, due to the higher retail prices, the company official said.
The utility posted a net loss of Won 844.8 billion for the first nine months, compared with a net profit of Won 72 billion a year ago. Operating profit slipped 16.7% year on year to Won 581.4 billion.
Kogas saw its debt decrease to Won 29.23 trillion as of end-September, from Won 30.54 trillion as of end-2016. But its debt-to-equity ratio rose to 332.6% end-September from 325.4% end-2016.