South Korea’s Kogas, the world’s second-largest corporate buyer of LNG, is reportedly interested in investing in shale gas projects in the United States.
The move is expected to alleviate any possible trade pressure on South Korea from the United States government, as president Trump left the Trans-Pacific Partnership.
Reuters reports Lee Seung-hoon , CEO of Kogas as saying the trade pressure from the US is likely to rise, but the investment could curb the effects.
He added that U.S. shale resources are crucial for securing stable supplies. In 2012, Kogas signed a 20-year deal with Cheniere for the supply of 2.8 million tons per year, starting in 2017.
Lee added that the first cargo from Cheniere’s Sabine Pass LNG facility in Louisiana is expected to arrive this summer.
In addition, Kogas could be importing Iranian LNG together with liquefied natural gas from the United States without destination clauses, Lee said. However, Iran does not have LNG export facilities meaning deliveries to South Korea would require infrastructure development, investment and time.
South Korea’s LNG demand is expected to remain at 30 million tons per year during 2017, but according to Lee it is expected to keep dropping in the short term as nuclear, and coal-fired power plants increase output.