07-10-2012, 09:56 PM
First, forming JKM, second busting KOGAS Monopoly. Kobama is serious bout managing LNG prices. Guess he reads SHU and figured out LNG supply is short until at least 2018.
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S Korea to revive parliamentary bid to deregulate LNG imports, domestic sales
Seoul (Platts)--10Jul2012/427 am EDT/827 GMT
South Korea will revive a long-delayed plan to deregulate LNG imports and domestic sales as part of an overhaul of the country's gas sector, currently dominated by state-run Korea Gas Corp., the finance ministry said Tuesday.
"The government will submit a gas industry reform bill for parliamentary approval as early as possible," the Strategy-Finance Ministry said in a statement.
The bill was tabled in the National Assembly in 2009 but ensnared by political wrangling between ruling and opposition parties until it was scrapped due to the assembly's term ending in May.
With the newly elected National Assembly opening its inaugural session in July, the government will re-submit the bill for parliamentary approval, the ministry said. "It is part of government's efforts to boost efficiency of state-run companies," it said.
The bill calls for the phasing out of the country's decades-long monopoly on LNG imports and domestic distribution and the admission of new providers into the market. If passed, the legislation would allow local companies to import LNG and resell it in the domestic market.
The South Korean government has allowed local companies to import LNG directly, bypassing Kogas, since 1993, but only on the condition they use it in their own power plants and do not resell it in the domestic market. This has given Kogas a monopoly on the domestic sale of LNG since its establishment in 1983.
The Ministry of Knowledge Economy, responsible for energy, industry and commerce, says the monopoly is hindering the import of LNG at lower prices.
"The liberalization of LNG imports would boost the country's competition in international markets, which would ensure supplies at lower prices," a ministry official said.
CONCERNS OVER RISK OF HIGHER PRICES, JOB CUTS
Opposition lawmakers fear the proposed deregulation could backfire, weakening Kogas' bargaining position in international markets and leading to increases in import costs.
Kogas' labor union has also vowed to protest the bill, claiming it would lead to consumer price hikes. Deregulation could also slash jobs at Kogas.
South Korea's largest steelmaker Posco was the country's first private company to directly import LNG, importing 550,000 mt/year of LNG since July 2009 from the BP-led Tangguh LNG consortium in Indonesia. K-Power, an affiliate of top oil refiner SK Innovation, has also directly imported 600,000 mt/year of LNG since 2006 for electricity generation.
Korea Midland Power Co., a unit of South Korea's state-run power monopoly Korea Electric Power Co., signed a $3.4 billion agreement in April to import 4 million mt of LNG from trading company Vitol over ten years beginning 2015. It is the first state-owned company to import LNG directly and bypass Kogas.
Kepco units buy all its LNG requirements from Kogas, accounting for about half its total fuel cost, and has long sought to import directly in a bid to reduce costs.
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S Korea to revive parliamentary bid to deregulate LNG imports, domestic sales
Seoul (Platts)--10Jul2012/427 am EDT/827 GMT
South Korea will revive a long-delayed plan to deregulate LNG imports and domestic sales as part of an overhaul of the country's gas sector, currently dominated by state-run Korea Gas Corp., the finance ministry said Tuesday.
"The government will submit a gas industry reform bill for parliamentary approval as early as possible," the Strategy-Finance Ministry said in a statement.
The bill was tabled in the National Assembly in 2009 but ensnared by political wrangling between ruling and opposition parties until it was scrapped due to the assembly's term ending in May.
With the newly elected National Assembly opening its inaugural session in July, the government will re-submit the bill for parliamentary approval, the ministry said. "It is part of government's efforts to boost efficiency of state-run companies," it said.
The bill calls for the phasing out of the country's decades-long monopoly on LNG imports and domestic distribution and the admission of new providers into the market. If passed, the legislation would allow local companies to import LNG and resell it in the domestic market.
The South Korean government has allowed local companies to import LNG directly, bypassing Kogas, since 1993, but only on the condition they use it in their own power plants and do not resell it in the domestic market. This has given Kogas a monopoly on the domestic sale of LNG since its establishment in 1983.
The Ministry of Knowledge Economy, responsible for energy, industry and commerce, says the monopoly is hindering the import of LNG at lower prices.
"The liberalization of LNG imports would boost the country's competition in international markets, which would ensure supplies at lower prices," a ministry official said.
CONCERNS OVER RISK OF HIGHER PRICES, JOB CUTS
Opposition lawmakers fear the proposed deregulation could backfire, weakening Kogas' bargaining position in international markets and leading to increases in import costs.
Kogas' labor union has also vowed to protest the bill, claiming it would lead to consumer price hikes. Deregulation could also slash jobs at Kogas.
South Korea's largest steelmaker Posco was the country's first private company to directly import LNG, importing 550,000 mt/year of LNG since July 2009 from the BP-led Tangguh LNG consortium in Indonesia. K-Power, an affiliate of top oil refiner SK Innovation, has also directly imported 600,000 mt/year of LNG since 2006 for electricity generation.
Korea Midland Power Co., a unit of South Korea's state-run power monopoly Korea Electric Power Co., signed a $3.4 billion agreement in April to import 4 million mt of LNG from trading company Vitol over ten years beginning 2015. It is the first state-owned company to import LNG directly and bypass Kogas.
Kepco units buy all its LNG requirements from Kogas, accounting for about half its total fuel cost, and has long sought to import directly in a bid to reduce costs.