Korea turns to U.S. for LNG in move to curb Middle East reliance

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Korea turns to U.S. for LNG in move to curb Middle East reliance

Published: 18 Dec. 2024, 18:56

PARK EUN-JEE
[email protected]

Audio report: written by reporters, read by AI

An LNG carrier arrives at a dock in Incheon. [KOGAS]

Korea Gas Corp. (Kogas), the country’s state-run gas supplier that ranks among the largest liquefied natural gas (LNG) buyers in the world, has selected multiple U.S. companies to source LNG in a major shift from procurement from the Middle East.

The selection came as the country looks to increase imports of oil and gas from the United States in a bid to lessen Korea's trade surplus with the world’s biggest economy and diversify energy sources.

Kogas's long-term LNG contracts with Oman and Qatar expire by the end of this year.

“The selection of the U.S. bidders is intended to replace the soon-to-expire long-term contracts,” a spokesperson at Kogas said, “But we are not allowed to reveal their names until the bidding is finalized next year.”

Under the contracts, Qatar’s Ras Laffan Liquefied Natural Gas has supplied about 4.9 million tons of LNG per year since 1999 and Oman LNG 4.1 million tons since 2000.

The decision by the state-run corporation also comes with diplomatic implications since the incoming Donald Trump administration is expected to put pressure on Korea for more energy imports.

Kogas struck a series of LNG contracts with the United States worth around 11 trillion won ($7.8 billion) between 2018 and 2019, during Trump's first term.

Other industry insiders and local media reports say that pricing could be also taken into consideration as the U.S.-sourced LNG will likely have a lower price tag compared to shipments from Oman and Qatar.

Kogas was the single largest LNG importing company last year, bringing in a combined 44.12 million tons, according to data provided by the Ministry of Trade, Industry and Energy.

BY PARK EUN-JEE [[email protected]]