By MIN-JEONG LEE
The International Energy Agency has called on South Korea to
shape a detailed plan for a reform of the country's natural-gas
market, currently dominated by state-run supplier Korea Gas
Corp., to ensure a fair competition in trade, the Ministry of
Knowledge Economy said in a press release today.
Korea Gas, the largest corporate buyer of liquefied natural
gas (LNG) in the world, is the country's main supplier of
LNG for local companies and has faced continued disputes
locally on whether the company should maintain its role as the
The IEA noted in a report on South Korea's energy policies
that LNG trading between Korea Gas, or Kogas, and other local
gas companies should be encouraged and big local consumers of
LNG should be given the right to select a supplier, other than
Korea Gas, for buying LNG at an appropriate market price, the
ministry said in the release.
Local companies other than Kogas are currently not allowed
to import LNG for trading purposes. While the government has
allowed companies to import LNG for their own consumption since
2001, only a few deals have materialized since then.
Earlier this year, a power-generating unit of Korea Electric
Power Corp. said it struck a $3.4 billion deal with
Switzerland's Vitol to buy liquefied natural gas under a
long-term contract, marking the first successful attempt by a
unit of Korea Electric Power at buying LNG directly from
suppliers instead of purchasing through Korea Gas.
The deal had boosted hopes back then that it may pave the
way for more similar deals by other local companies down the
road, though they are likely to happen only slowly, over a long
Kogas has plans to import 36.456 million tons of LNG
this year, up 7.3% from about 33.97 million tons last
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