LNG

South Korea, the third-largest Asian liquefied natural gas importer, has announced increases in electricity and gas prices to offset the cost of power generation from imports like LNG.

The Australian Labor-led government plans to change the petroleum resource taxes regime to increase the tax paid by the liquefied natural gas industry over the next four fiscal years.

South Korea, the third-largest Asian liquefied natural gas importer, may be seeking more short-term cargoes after temporarily suspending one of its nuclear reactors on April 9 for safety reasons.

A statement from Korea Hydro & Nuclear Power Co. (KHNP) said that the No. 2 reactor at the Kori Nuclear Power Plant, located at the port of Busan, about 325 kilometres (202 miles) southeast of the capital Seoul, was halted on April 8 upon the expiry of its 40-year permission to operate.

The Kori-2 unit began commercial operations in April 1983 as the country's third nuclear reactor.

Currently, South Korea operates 18 out of its 25 nuclear reactors and this closure takes it down to 17.

The shutdown comes at a time when the Korean Ministry of Trade, Industry and Energy has plans to also cut coal-fired power generation by around half (from 42 percent to 22 percent) through 2030.

Phase-out policy

The new Government of Yoon Suk Yeol had reversed the previous government’s nuclear phase-out policy and has been working to expand nuclear power generation to 30 percent of the country's total by 2030, with the figure for 2021 coming to 27.4 percent.

South Korea’s LNG imports had risen to an annual 47 million tonnes and plans to have more nuclear power to replace higher-priced LNG have now been affected by the Kori-2 plant closure.

The largest LNG suppliers to South Korea are Qatar and Australia with around 11 MTPA of cargoes each followed by the US and Oman.

South Korea sources all of its gas from LNG imports more about 55 percent is used to generate electricity with 16 percent used as chemical feedstock or a source of heat and 26 percent allocated to the commercial and residential gas sectors.

The company responsible for the Kori-2 nuclear reactor is Korea Hydro & Nuclear Power Co. (KHNP).

Huge losses

KHNP is itself a unit of Korea Electric Power Co. (KEPCO), a company 51 percent owned by the government and which is in the middle of a financial crisis after reporting huge losses in 2022.

The utility’s losses reach 30 trillion Korean won ($23 billion) in 2022, though has been kept viable by the Government allowing an increase in its debt ceiling and for giving permission to raise power prices.

As regards the Kori-2 nuclear reactor, the Government explained that the suspension was “inevitable” as the process to extend its lifespan has been delayed due to the previous government's policy to phase out nuclear power.

The new plans involves keeping the Kori-2 plant open until June 2025.

However, even if the government’ re-opening procedures are speeded up the closure is expected to last for two years.

Senex Energy, a leading coal-seam gas company controlled by South Korea’s POSCO International in the onshore Surat Basin of Queensland and which is part of the Gladstone LNG upstream supply chain, said it would have to suspend its A$1 billion (US$670 million) investment plan because of the Australian government gas price cap and market interference.

Mozambique President Filipe Jacinto Nyusi has visited and inaugurated the “Coral-Sul FLNG” installation located in the ultra-deep waters of the Rovuma Basin that has turned his southeast African nation into an LNG exporter.

The inauguration ceremony was also attended by the Minister of Mineral Resources and Energy Carlos Zacarias and by other representatives of Mozambique’s government.

They were accompanied by a delegation from the resources operator, the Italian energy company Eni and led by Guido Brusco, Chief Operating Officer of Natural Resources at the Milan-based company.

The event took place 10 days after the first LNG cargo was lifted on 13 November from the “Coral Sul FLNG” vessel.

“Coral Sul is a landmark project for the gas industry and is projecting Mozambique onto the global LNG stage, paving the way to a transformational change of the country through the development of gas resources,” said a statement.

Area 4 licence

Eni, as upstream operator of the Area 4 licence resources in the Coral South gas reservoir, is ramping up the project to its full liquefaction capacity of 3.4 million tonnes per annum.

The “Coral-Sul FLNG” vessel was constructed at Samsung Heavy Industries shipyard in Geoje in South Korea and is the first floating LNG facility ever deployed in the deep waters of East Africa.

The other partners of Eni in the FLNG project are US major ExxonMobil Corp., Chinese major China National Petroleum Corp., Galp Energia of Portugal, Korea Gas Corp. and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), the state energy company.


The 174,000 cubic metres capacity LNG carrier “British Sponsor”, operated by BP, lifted the first cargo from the liquefaction hull.

BP has a long-term agreement spanning over 20 years to purchase 100 percent of LNG output from the project to add to its global supply portfolio.

President Nyusi and the Eni delegation in addition to visiting the “Coral Sul FLNG” hull also held talks on other possible LNG developments in Mozambique.

“They discussed the possibility of replicating the success of the Coral South project with further FLNG developments as well as other onshore projects,” said Eni.

“They also discussed the agri-feedstock project under an agreement between Eni and the Government of Mozambique,” it added.

“The project aims to produce oil from seeds, wastes and residues that do not compete with food crops and agriculture lands, to be used in biofuel production,” explained Eni.

South Korean steelmaker and LNG importer POSCO has been engaged in damage restoration work after a typhoon and was planning to re-start the Pohang steel complex as the gas-fired power plant using regasified LNG is returned to normal capacity.

Hyundai Motor Co., the leading South Korean car maker, has formally ended plans to build a gas-fired power plant at its Ulsan facility that would have used regasified LNG imports.

BW Offshore, the Norway-listed floating production units provider for oil and gas, has been awarded an Australian contract worth US$4.6Bln by LNG operator Santos for the Barossa gas field to provide feed-gas for the Darwin liquefaction plant.

Australian nine-month liquefied natural gas export totals are higher than last year even amid plant outages and the Covid-19 pandemic, putting the nation on track to cement its position as world No. 1 exporter ahead of Qatar.

Doosan Heavy Industries and Construction, South Korea's leading power plant builder, is on the point of reviving its gas turbines business to capture market share in the domestic market and eventually in Asia in the growing LNG-for-power sector.