December 1, 2023, by Aida Čučuk
Breaking News! South Korea is at risk of overinvestment and overcapacity due to the rapid development of liquefied natural gas (LNG) import and storage terminals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
Illustration; Archive; Courtesy of KOGAS
The report revealed that the country’s LNG market is funneling billions into infrastructure projects, aiming to improve receiving capacity for the fossil fuel. This includes the completion of 11 LNG terminal projects by 2031, further fueling concerns of overinvestment and underutilization.
“Our analysis shows a growing inequality between LNG import facilities and predicted LNG demand based on the nation’s net-zero objective,” said Michelle Chaewon Kim, the report’s author and an Energy Finance Specialist at IEEFA. Additionally, she stated that global conflicts could lead to increased fuel prices in South Korea, impacting the utilization of LNG receiving terminals.
Expressing the need for a faster transition to renewable energy, Kim highlighted the potential consequences of underutilizing LNG facilities and the volatile costs associated with fossil fuel-based power generation.
Thanks to IEEFA, MOTIE
As of 2023, South Korea has 7 LNG import terminals with substantial regasification and storage capacities, raising concerns over the potential overbuild of LNG import infrastructure in the country.
To learn more about the impact of LNG overinvestment in South Korea, read the full article here.