South Korea and fossil gas

From Global Energy Monitor

In 2019, South Korea was the third largest LNG importer after Japan and China.[1] GDP growth is forecast to remain between 2-3% through 2025.[2]

In July 2020, the South Korean government announced a new Green Deal pledging to invest US$76.6 billion for eco-friendly and low-carbon initiatives. In June 2019, the government released the Third Master Energy Plan which set an ambitious target of increasing the share of renewable energy in the power sector to 20% by 2030 and 30-35% by 2040 and to phase out nuclear power.[3]

This article is part of the Global Energy Monitor coverage of fossil gas
Sub-articles:
South Korea Power Generation by Fuel[1]
Electricity Demand

South Korea's long-term Basic Plan for Power Supply 2020-2034, forecasts energy demand reaching 102.5 GW in 2034, up from 90.3 GW in 2020.[4] Electricity demand is forecasted to reach 647,893 GWh in 2034 up from 520,499 GWh in 2019.[5]

In 2019, 54% of electricity consumption came from the industrial sector, 26% from commercial, 14% from residential, and 7% from other sectors such as transportation and agriculture.[1]

Major Players

Korean Gas Corporation (KOGAS), is the state-owned gas company, has a monopoly on the domestic wholesale natural gas market and also imports 90% of the country's LNG.[6]

The Korean National Oil Corporation (KNOC) is the state-owned oil company and the largest entity in the country's upstream oil and natural gas sector.

9th Basic Energy Plan for Power Supply 2020-2034

In December 2020, the Ministry of Trade, Industry and Energy approved the 9th Basic Energy Plan.[5]

In the plan, renewable energy will increase to 41.9% of the power generation mix by 2034, with LNG projected at 31.8%, coal at 15.6%, and nuclear power at 10.4%. In 2019, coal was 40.4% of the power generation mix, with LNG at 25.9% and nuclear power at 25.6%.

In 2019, renewables made up 6.5% of total power generation.[7] The ministry said it will quadruple the production capacity of renewable energy from 20.1 GW to 77.8 GW by 2034.[8]

The plan also calls for the shut down of 30-coal fired power plants by 2034, of which 24 will be turned into LNG power plants.[7]

South Korea Natural Gas Demand by Sector, 2018[1]

Natural Gas Demand

In 2019, total natural gas consumption in South Korea was 56 bcm.[9] In the 9th Basic Energy Plan, the natural gas installed capacity is targeted at 59.1 GW, up from 41.3 GW in 2020, a 43% increase. [10] In the plan, LNG-based power plants have a capacity of 55.5 GW in 2030.[4]

In 2019, 46% of natural gas was used in power plants, 28% in buildings, and 15% in the industrial sector.[11]

Key Demand Drivers

The industrial sector, mainly steel and petrochemical production, drive South Korea's electricity consumption and therefore is a key driver in gas demand.[1]

Since LNG is projected to increase its share in the power generation mix to 31.8% by 2034, the power sector will also be a key driver gas demand.[4]

Projection of Demand Growth

In 2018, the Ministry of Trade, Industry and Energy of South Korea released its 13th Long-Term Natural Gas Supply Plan for 2018-2031. The plan is based off the 8th Basic Energy Plan, which projects LNG share in power generation at 18.8% in 2030, which is significantly lower than the 31.8% share projected in the 9th Basic Energy Plan.[12]

The 2018 natural gas supply plan forecasts that gas demand will reach 40.5 mmpta, or 55.8 bcm, in 2031.[12] LNG demand grew at of 5.1% from 2005-2018 but is projected to grow 0.81% annually under the plan. Gas demand is forecasted to fall in the short-term before rising again post-2025, due to new additions of coal and nuclear capacity. Wood MacKenzie forecasts gas demand reaching 42 mmpta, or 57.5 bcm, by 2031, slightly higher than the government's projections.[13]

LNG demand for power generation is projected to be 17.09 mmpta, 23.6 bcm, in 2031. Demand for retail gas is forecasted to reach 23.4 mmpta, or 32.3 bcm, a 1.24% annual growth rate from current levels.[12]

Natural Gas Supply

South Korea's LNG Imports by Source, 2019[1]

South Korea produced 0.25 bcm of natural gas, or less than 1% of total gas consumption, from domestic resources in 2019.[1]

In 2019, there was 55.6 bcm of total LNG imports for South Korea, including 5.4 bcm from Oman, 15.3 bcm from Qatar, 10.6 bcm from Australia, 7.2 bcm from the United States, and 6.6 bcm from Malaysia.[9]

South Korea has no international gas pipeline connections as of 2021.[14]

Potential New Gas Sources

KNOC and Woodside Energy are jointly exploring deepwater blocks in offshore Ulleung Basin.[15]

A large portion of the continental shelves in South Korea have yet to be explored. According to a recent KNOC study, the Yellow Sea Basin is considered to have the highest potential but there have been no discoveries thus far. [15]

Current Gas Supply Projects

South Korea's minimal natural gas production comes from the Donghae-1 and Donghae-2 gas fields.[16]

Proposed Gas Supply Projects

Korea Zinc is currently constructing a 270 MW LNG Combined Cycle plant that will produce power for the captive consumption of their zinc plant, located in Onsan.[17]

Table 1: Proposed LNG Terminals in South Korea
Project Name Location Capacity Expected Commencement Date Sponsor Project Status Main Users
Hanyang LNG Terminal[18] Myodo TBA 2024 Hanyang Group Approved by MOTIE in 2020[19] Will be paired with hydrogen-related businesses
Dangjin LNG Terminal Dangjin, South Chungcheong Province 3.6 mtpa 2031 KOGAS Proposed Ten 200,000 cubic meter LNG storage tanks to be completed by 2025[20]

Table 2: Proposed Gas Power Plants in South Korea

Project Name Location Capacity Expected Start Sponsor Project Details/Status
Dangjin Power Station Dangjin Units 1&2: 1000 MW

Units 3&4: 1000 MW

Units 1&2: 2029

Units 3&4: 2030

Dangjin Eco Power Switching from coal to LNG[21][22][5]
Samchonpo Power Station South Gyeongsang Units 3&4: 1120 MW

Unit 5: 500 MW

Unit 6: 500 MW

Units 3&4: 2024

Unit 5: 2027 Unit 6: 2028

Korea Southeast Power Co. Switching from coal to LNG[21][5]
Yeongheung Power Station Yeongheung Island 1600 MW 2034 Korea Southeast Power (KOSEP) Switching from coal to LNG[21][5]
Taean Power Station Chungcheongnam-do Units 1&2: 1000 MW

Unit 3: 500 MW

Unit 4: 500 MW

Units 5&6: 1000 MW

Units 1&2: 2025

Unit 3: 2028

Unit 4: 2029

Units 5&6: 2032

Korea Western Power (Kowepo) Switching from coal to LNG[21][5]
Boryeong Power Station Boryeong Unit 5&6: 1000 MW Unit 5&6: 2025 Korea Midland Power Switching from coal to LNG[21][5]
Hadong Power Station South Gyeongsang Unit 1: 500 MW

Unit 2: 500 MW

Unit 3&4: 1000 MW

Unit 5&6: 1000 MW

Unit 1: 2026

Unit 2: 2027

Unit 3&4: 2028

Unit 5&6: 2031

Korea Southern Power Switching from coal to LNG[21][5]
Anyang CHP Unit 2-2[5] Anyang City 467.5 MW 2021 GS Power[23] Will provide steam for district heating[24]; Planned in 9th Basic Plan[5]
Onsan Smelter Power[25] Onsan 270 MW 2021 Korea Zinc Company Proposed
Naepo Green Energy CHP District Heating Plant South Chungcheong Province 495 MW 2022 Naepo Green Energy Will provide steam for district heating[26]; Planned in 9th Basic Plan[5]
Gimpo CHP Thermal Plant Gyeonggi Province 495 MW 2022 Korea Western Power Company (KOWEPO)[27] Will use LNG to produce district heat and power[28]; Planned in 9th Basic Plan[5]
Yeoju Complex Power Station[29] Yeoju 1000 MW 2022 Yeoju Energy Services Under construction
Smart Energy Center LNG Cogeneration Plants[30] Unit 1: Icheon

Unit 2: Cheongju

Unit 1: 570 MW

Unit 2: 570 MW

2022 SK Hynix Will be built for stable energy supply for semiconductor factories
Ulsan CC Power Plant and Polypropylene Plant Ulsan 1122 MW 2024 SK Gas Ltd. Energy for industrial companies[31]; Planned in 9th Basic Plan[5]
Shinsejong CC Power Plant Sejong City 585 MW 2023 Korea Southern Power Co. Will provide steam for district heating[32]
Tongyeong Complex[33] Tongyeong City 920 MW 2024 Tongyeong Eco Power Under construction; Planned in 9th Basic Plan[5]
New LNG #1 500 MW 2029 Planned in 9th Basic Plan[5]
New LNG #2 500 MW 2029 Planned in 9th Basic Plan[5]
Pocheon IPP Power Station[34] Pocheon 900 MW TBD Pocheon IPP Co Ltd Proposed

Table 3: Proposed Gas Pipeline Projects in South Korea

Project Name Capacity Owner Expected Start Length (km) Diameter (inches)
Trans-Korea Gas Pipeline 10.3 bcm/yr KOGAS, Gazprom 1202 km

Projection of Gas Production

South Korea has minimal indigenous gas production.

Articles and Resources

References

Related GEM.wiki articles

External resources

External articles

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