The Magazine for Asian Investors
South Korea wants to buy more liquefied natural gas (LNG) to replenish supplies before winter.
According to the South Korean Energy Ministry, South Korea, the world’s third-largest LNG importer, is seeking to replenish its LNG stocks to meet expected rising domestic demand. The goal is to increase LNG stocks from the current 34% to about 90% of total storage capacity in November.
The announcement comes after a summer heat wave and great uncertainty over the Russia-Ukraine conflict.
Even though South Korea is not expected to experience supply shortages during the winter, the purchase of more LNG in addition to long-term contracts is likely to increase international competition.
Spot LNG prices rose to near record levels following Russia’s military invasion of Ukraine in late February.
It will also likely push Europe to find more needed supplies to replace Russian gas and replenish its LNG supply, although Europe can increase its LNG supply near a five-year average of 72% of its storage capacity.
According to the International LNG Importers Group, South Korea bought 16.6 million tons of LNG on the spot market last year, representing 35% of its total imports.