South Korea’s Ministry of Economy and Finance is undertaking a feasibility study to build what could be the country’s fifth government-run liquefied natural gas (LNG) import terminal.
The study is to be completed in March 2020, with the construction plan to be drawn up in April 2020.
Korea Gas Corporation (KOGAS), South Korea’s main procurer of natural gas imports, and the operator of the other four state-controlled LNG import terminals, would operate the terminal if it goes ahead.
Should the terminal construction be approved, the design will be carried out from May 2019 to December 2020, with the land purchase and any compensation to affected fisheries to be made from January 2021 to March 2022.
Tentatively, the plan is to complete four LNG tanks in 2025, two tanks in 2027 and another two tanks in 2031. The proposal for a new terminal is in line with President Moon Jae-in’s vision of phasing out nuclear power in favour of natural gas. South Korea imported a record 44 million tonnes of LNG in 2018, making it the world’s third largest importer behind Japan and China.
The construction budget is around KRW3.2 trillion (USD2.8 billion) and the terminal would have annual processing capacity of 3.6 million tonnes. KOGAS’ other terminals are in Pyeongtaek, Incheon, Tongyeong and Samcheok.
The country has two privately run LNG import terminals; one is in Boryeong, run by a joint venture between GS Energy and SK E&S, and the other, in Gwangyang, owned by South Korea’s largest steelmaker POSCO.
KOGAS is said to be considering operating its proposed fifth terminal through a public-private partnership to spread the costs and risks. It is hoped that with another terminal and storage facilities, the import costs of LNG can be lowered by reducing spot purchases during the peak winter season. Under South Korea’s 12th and 13th long-term natural gas supply and demand plan, the South Korean government aims at a storage-to-sales ratio of 20%.