South Korea’s gas decline – time for a turnaround
South Korea’s gas demand and LNG imports have been in decline, and will continue to fall this year. (Kogas)
As the second-largest LNG importer in the world, South Korea’s gas demand has a direct impact on the LNG balance in Asia Pacific. South Korea’s gas market has seen two consecutive years of decline, and further drops are expected this year – helping to add to the glut in the LNG market. But a recovery before 2020 is likely, and the timing of a return to growth, as well as a potential increase in absolute volumes, could help shape potential tightening in the Asia Pacific market over the next five years.
Gas accounts for around 14% of South Korea’s energy mix. The power sector makes up roughly 40-50% of total gas demand, with the residential and commercial sector and the industrial sector accounting for approximately 25-30% and 17-20% respectively. South Korea’s gas demand fell by 10% on an annual basis in 2015 after having dropped by 9% year on year in 2014. The country’s LNG imports fell by 7% and 10% year on year in 2014 and 2015 respectively.