Gas Gong, 15-Year Natural Gas Supply Contract for Combined Heat and Power in Naepo New Town

Exterior view of the Korea Gas Corporation headquarters building. (Photo by Korea Gas Corporation)

[Asia Economy Reporter Moon Chaeseok] Korea Gas Corporation will supply 335,000 tons of natural gas annually for power generation to the 555MW combined heat and power plant in Naepo New City, Chungnam, for 15 years starting in 2023. This is the second contract signed since the introduction of the individual pricing system for power generation in January.

On the 28th, Gas Corporation announced that on the 14th it signed a supply and acceptance agreement under the individual pricing system for power generation to supply a fixed annual volume of approximately 335,000 tons of natural gas to Naepo Green Energy for 15 years starting in 2023.

Naepo Green Energy is a special purpose company (SPC) established by Korea Southern Power and Lotte Construction for the district energy project in Naepo New City, Chungnam.

The individual pricing system is a scheme introduced for the first time this January, which supplies natural gas linked individually to each power generator under the contract price and conditions of the respective introduction contract.

Under the previous average pricing system, Gas Corporation averaged the prices of all liquefied natural gas (LNG) import contracts it signed and supplied the same price to all power generation companies. This was criticized for being relatively disadvantageous to small-scale power plants.

Earlier, Gas Corporation signed a supply and acceptance agreement under the individual pricing system with Korea District Heating Corporation in October.

Gas Corporation is currently negotiating and bidding with power generation companies for volumes ranging from 2 to 3 million tons. It is known that negotiations with multiple power companies are underway with the goal of signing contracts early next year.

A Gas Corporation official explained, "This agreement is a case of win-win cooperation achieved by combining the core competencies of Gas Corporation, a public enterprise in the gas and power sectors, Korea Southern Power, and Lotte Construction, which has plant technology."

He added, "Through the harmony of experience and technical skills in each sector, we can expect synergistic effects in future business operations."

This content was produced with the assistance of AI translation services.