SEOUL: South Korea, the world's second-largest liquefied natural gas (LNG) importer, said on Sunday it will supply LNG to Japan utilities after the country made a request on Saturday following an earthquake and tsunami.
The Korean economy ministry said in a statement that Japan, the world's top LNG buyer, was likely to import an additional one million to 1.5 million tonnes of LNG per month after April.
The 8.9-magnitude earthquake that struck on Friday caused the loss of an estimated 9,700 megawatts (MW) of nuclear and 10,831 MW of thermal power generation, putting the onus on other plants to fill the gap.
The delivery would be on a swap basis and South Korea would "prioritise the supply", the ministry said, adding that to make this swap, state-run Korea Gas Corp (KOGAS) would actively negotiate with LNG sellers.
If Japan continues increasing LNG imports, it could boost global LNG prices, the statement added.
"To help Japan recover from the quake, we decided to supply some LNG from import volumes for late March through April, as long as it does not disrupt local supply," the statement said, noting that Japan had made the swap request as it would take at least one month if they secure LNG from sellers.
"We don't see any immediate impacts on local supply due to this upcoming swap with Japan, as we have secured more than 98 percent of this year's estimated LNG demand through short- and long-term contracts and our inventories are enough."
The statement said the government would complete mid- and long-term import contracts as soon as possible to prevent any shortage in inventories.
It added South Korea under a long-term plan would secure stable LNG supplies by expanding its storage facilities to 15.36 million kilo litres by 2024 from 7.12 million kilo litres in 2010.
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