Starting 2025, 2 Million Tons Per Year of New LNG Imports from Qatar for 20 Years

[Sejong=Asia Economy Reporter Kwon Haeyoung] Starting from 2025, liquefied natural gas (LNG) produced in Qatar will be newly imported into South Korea at an annual scale of 2 million tons for 20 years.

The Ministry of Trade, Industry and Energy announced on the 12th that it has approved the new long-term LNG import contract with Qatar applied for by Korea Gas Corporation.

Following government approval, Korea Gas Corporation signed a long-term import contract in Doha, Qatar on the same day with Qatar Petroleum, which includes the supply of LNG at an annual scale of 2 million tons from 2025 to 2044. Currently, Korea Gas Corporation has three long-term contracts with Qatar, importing a total of 9 million tons of LNG annually. Among these, one long-term contract for about 4.9 million tons is scheduled to expire in 2024.

According to the Ministry of Trade, Industry and Energy, the newly signed long-term import contract secured favorable terms such as competitive pricing and import flexibility. Accordingly, it is expected to greatly contribute to the stability of domestic natural gas supply and the reduction of prices. First, the contract price is the lowest among the long-term contracts currently signed by Korea Gas Corporation and is evaluated to be competitive even considering recent international LNG market prices.

In particular, Korea Gas Corporation improved the price terms agreed upon in 2019 with the Qatari side to be more favorable to Korea, reflecting changes in the international natural gas market due to COVID-19 and other factors last year. Through this, it is expected to save about 1 billion dollars in costs over the 20-year import period compared to the previously agreed price.

Furthermore, Korea Gas Corporation secured flexibility in this contract, such as buyer’s rights to increase, decrease, or cancel purchases, to mitigate the rigidity of the long-term import contract and respond stably to fluctuations in natural gas demand.

Yoo Beopmin, Director of Resource Industry Policy at the Ministry of Trade, Industry and Energy, said, "It is highly significant that we have stably secured competitively priced natural gas amid increasing domestic natural gas demand due to the expansion of LNG power generation and the hydrogen economy," adding, "We expect that this contract will strengthen cooperation between the two countries not only in the natural gas sector but also in shipbuilding, plant industries, and more."

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