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South Korea bumps up LNG spot market purchases
PERFORMANCE
SOUTH Korea is taking steps to purchase more LNG on the spot market in order to bump up inventories before winter, the country’s Ministry of Energy said earlier this week.
The country is expecting domestic demand to rise in the coming months and is planning to increase stocks to levels of 90% by Novem- ber, according to the ministry. Current stock levels are about 34% after a big summer drawdown.
Summer heatwaves caused greater power demand and now the government is preparing for any uncertainties that may arise with the ongoing war in Ukraine. South Korea’s quest for more LNG may affect that of Europe, which is also seeking to increase gas stocks in light of the deep reduction in gas supplies that normally arrive from Russia. The war has caused a steep rise in global LNG prices as countries around the world have sought to line up more non-Russian cargoes.
The ministry reported that state-owned Korea Gas (KOGAS) started buying spot LNG in April and had purchased 3.5mn tonnes in July. It added that current inventories stand at around 1.81mn tonnes, which is above the minimum level of 910,000 tonnes that South Korea main- tains for winter.
According to the ministry, the country will use spot purchases, short-term contracts, imports of LNG from overseas assets and possi- bly swapping volumes with private importers to meet its inventory goals.
South Korea, which is the world’s third-larg- est importer of LNG, bought 16.6mn tonnes of spot LNG in 2021, according to the International Group of LNG Importers. Bloomberg said trad- ers had reported that KOGAS had bought more than 20 LNG cargoes over the last few weeks for winter delivery. According to the report, KOGAS is seeking to purchase another 10mn tonnes by the end of the year.™
Senex unveils Surat Basin gas expansion plans
INVESTMENT
AUSTRALIA’S Senex Energy has said it will invest more than AUD1bn ($710mn) into an expansion of its Atlas and Roma North gas pro- jects in Queensland’s Surat Basin. The company described the expansion as being part of a push to “help secure Australia’s energy future”.
The company said that it was ready to increase its gas production to 60 petajoules (1.6bn cubic metres) per year, following years of exploration and studies. This figure represents more than 10% of gas demand from Australia’s East Coast and around 40% of Queensland’s demand, Senex noted. Work on the expansion is due to begin in the coming weeks, with first gas anticipated within two years.
The company’s investment comes as Australia explores ways of avoiding looming domestic gas shortages predicted for 2023 and 2024. Indeed, this week, ministers from the states of New South Wales and Victoria called for local gas supply to be prioritised for the domestic market rather than being exported as LNG. (See: Beach, BP
finalise LNG offtake agreement, page 4) Mean- while, plans to build LNG import terminals are advancing and some producers are stepping up efforts to raise output. Senex aims to be a con- tributor to this push.
“This new investment to significantly boost domestic natural gas supply supports Australia’s energy security and continues to underscore Queensland’s position as a reliable energy pro- vider,” stated Senex’s CEO, Ian Davies. “Senex prides itself on supporting the production of natural gas for the Australian market. It was only three years ago Senex began supplying the east coast market from Queensland’s Surat Basin and to date [the company] has already invested more than half a billion dollars [$355mn] in new supply.”
Senex’s investment comes after the company was taken over by Posco International and Han- cock Energy earlier this year, and Davies said their willingness to commit capital went beyond what was possible prior to the acquisition.™
OCEANIA
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