South Korea LNG market report

Commodity Market Report 16 December 2022

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Report summary

South Korea will remain the third largest LNG importer globally until the late 2030s when India is due to overtake it. We expect LNG demand will remain high in 2022 after the country hit record level imports in 2021. But LNG will still face pressure in the early 2020s in the wake of new nuclear and coal capacity in the power sector. The mid-term outlook for LNG demand remains positive on the back of supporting power sector policies. LNG demand will grow into the late 2020s as South Korea shifts away from coal to the benefit of gas and renewables, although potential expansions in nuclear will limit upside to LNG. Longer-term LNG demand will gradually decline as the energy transition takes a firmer hold, renewables and battery storage increasingly compete in the power sector and lower carbon energies like green hydrogen are adopted.

Inter-fuel competition, power sector policies and energy transition commitments are the primary drivers of South Korea’s LNG demand outlook
South Korean energy policy is changing but has remained supportive of gas and LNG over recent years
KOGAS still dominates the country’s LNG infrastructure, but competition from third parties is rising
As long-term contracts expire from the mid-2020s, we expect buyers will be in the market for new deals, as energy security remains a primary concern for South Korea