By the OGJ Online Staff
LONDON, Jan. 3 -- South Korea has become the latest country to announce plans to build liquefied natural gas facilities this year, joining China, Norway, Nigeria, and Australia in the dash-for-gas.
Pohang Iron & Steel Co., the second-largest steel maker in South Korea, plans a $290 million LNG terminal to cut costs and secure fuel supplies for its power plants. Construction of the 1.7 million tonne/year terminal, at Kwangyang south of Seoul, will begin in June and be completed in March 2005. The switch to gas from oil and coal would save the company $10 million/year.
Pohang generates most of its power needs but wants to reduce purchases from state-run Korea Electric Power Corp. The new terminal would give the company surplus gas to sell to other companies or supply future power plants. There is also speculation in South Korea that Pohang eventually will make most of its profits from power generation rather than steel making.
The company has preliminary plans to import LNG from Southeast Asia, Australia, and the Middle East. It said last May it might build two 500-Mw plants fired by imported gas after authorities blocked plans to build a coal-powered plant for environmental reasons.
The move comes at a time when Norway is about to start construction of Europe's first LNG plant, which will supply customers in the US and Spain. Australia plans to begin work at a fourth train to liquefy gas from the North West Shelf, and Nigeria is expanding its LNG capacity.
The Nigerian government Thursday said it has placed orders worth $80 million with South Korean companies for the first phase of construction of two LNG plants, part of its NLNG project.
The moves come as the International Energy Agency (IEA) is predicting a large increase in gas use, especially in Asia. The gas share of total primary energy supply has been less than 10% in Asia compared with more than 20% in Europe and North America.
IEA said, "There are still only a few international pipelines, including those projected to be built, and Asia is clearly different from Europe and North America in this regard. Now additional Asian countries such as the Philippines, Viet Nam, and Myanmar are promoting gas production and use. Gas will play an increasingly important role in the region in the next century."
IEA said its World Energy Outlook 1998 projected a gas demand increase of 5.5%/year in East Asia from 1995 to 2020 and 6.5% in China. It noted those figures may be outdated.
