Steady, robust economic growth and a rapidly expanding automobile fleet during the next 20 years will boost Korea's oil demand to 1.9 million b/d by 2010 from 787,000 b/d in 1989.
Total primary energy demand in Korea will increase to 188 million tons of oil equivalent by 2010 from 82 million tons in 1989. Oil will have about a 50% energy market share at the end of 20 years, as it does now.
Those estimates were outlined by Bok-Jae Lee, director, Oil and Gas Policy Division, Korea Energy Economics Institute, in a paper prepared for delivery at the sixth Asia-Pacific Petroleum Conference last month in Singapore.
The estimates are from an interim report, Korean Energy Strategies Toward the 21st Century, published in July by Korea Energy Economics Institute.
DEMAND GROWTH
The Korean economy is assumed to grow at 6.7%/year in the 1990s and 4.5%/year during the first 10 years of the next century. The manufacturing sector will account for a steadily increasing share of gross national product, rising to 41.4% in 2010 from 34.6% in 1989, Lee predicted.
Another key factor in consumption is an expected 13%/year increase in the car fleet during the 1990s, although it will slow to 3% during the next decade. Transportation's share of energy demand will grow to 27% in 2010 from 19% in 1989.
Residential and commercial demand will account for a declining share of market, to 22% in 2010 from 30% in 1989.
Domestic oil demand gained 14.7% to 787,000 b/cd in 1989 despite slow economic growth. Gasoline gained more than 34% to 50,000 b/cd, and other products-diesel, propane, jet fuel-had healthy increases.
POLICY DIRECTIONS
Like other nations in Asia-indeed, around the world-security of supply, conservation, environmental protection, and increasing reliance on market forces are the hallmarks of Korean energy policy, Lee said.
To help meet increasing product demand, the private sector is scheduled to expand its refining capacity to 1.235 million b/d by 1992 from the current 840,000 b/d. Cracking capacity will soar to 154,000 by 1993 from the present 34,000 b/d.
Refinery utilization rate in 1989 was more than 95%.
Consumption of unleaded gasoline accounted for 48% of total consumption last year. And low sulfur diesel fuel-0.4% or less-made up 80% of consumption.
The private sector, with financial support from the government, has a plan to build 120,000 b/d of desulfurization capacity by 1992.
Korea also hopes to diversify sources of crude imports. Stockpiling capacity will be expanded to maintain stocks of 60 days of consumption, and some level of petroleum stocks may be reacquired for refiners, importers, and distributors, Lee said.
The government is studying further price deregulation. Seven petroleum products-including jet fuels, asphalt, gasoline for military use, and naphtha-have been deregulated.
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