S Korea to look for more US oil, gas imports under Trump administration
South Korea will seek more oil and gas imports from the US as part of its efforts to cope with any possible trade disputes after the new administration takes over in Washington, the vice minister of trade, industry and energy said Friday.
“We are looking for what we can take to expand energy cooperation with the US, such as shale gas imports, with the Trump administration’s looming protectionist policies,” Woo Tae-hee, vice minister in charge of energy, told S&P Global Platts on the sidelines of a trade forum in Seoul.
South Korean companies have been increasing oil and gas imports from the US to diversify its supply sources from the Middle East, Woo said.
GS Caltex imported 2 million barrels of US Eagle Ford crude over November-December, the country’s first purchase of American crude other than condensate and Alaskan crude since Washington lifted a 40-year restriction on crude oil exports in late 2015.
State-owned Korea Gas Corp. planned to import 2.8 million mt/year from the Sabine Pass terminal in Louisiana from July this year under a 20-year contract that will help diversify supply sources, Woo said. This will the first US LNG to be shipped to South Korea.
SK E&S, a major private power utility and city gas provider, plans to import 2.2 million mt/year from the proposed Freeport LNG terminal in Texas for 20 years from 2019.
Another major power producer GS EPS also plans to buy 600,000 mt/year of LNG from the US in a 20-year contract with Cameron LNG from 2019 to 2038.
In addition to the LNG contracts, SK E&S holds a 49.9% stake in the Woodford shale gas field in Oklahoma bought in September 2014 for $1.1 billion.
GS Energy and GS Global holds 10% and 20%, respectively, in Oklahoma’s Nemaha field, a stake that gives the two GS affiliates access to a combined 4 million barrels of crude and 470,000 mt of natural gas.
The government will provide support to local companies pushing for cooperation in shale gas to take advantage of fossil-focused energy policies, Woo said.
Minister of trade, industry and energy Joo Hyung-hwan has also stressed the need to import oil and gas from the US to ease trade deficit and boost South Korea’s energy security.
“For South Korea, oil supply from a politically stable ally will help stabilize oil prices, and it will provide an additional layer for energy security. For the US, exporting shale oil to Korea will help create new jobs and reduce the trade deficit against South Korea,” Joo told a recent meeting of the American Chamber of Commerce in South Korea.
In a separate meeting, Joo told CEOs of South Korean crude importing companies to seek more purchases of US oil and gas and look for opportunities to participate in US exploration projects.
South Korea, the world’s fifth-largest crude oil buyer and second-biggest LNG importer, ships in almost all of its crude oil and gas requirements, mostly from the Middle East.
South Korea’s crude oil imports from the US in 2016 are estimated at 2.4 million barrels, compared with 2.91 million barrels in 2015 and 1.66 million barrels in 2014, according to data from state-owned Korea National Oil Corp. .