S. Korea to inject 6.9 trl won to expand LNG infrastructure

(ATTN: UPDATES with more details in paras 5, 7; ADDS with new paras 4, 11-12)
By Lee Joon-seung
SEOUL, Dec. 29 (Yonhap) -- South Korea will inject 6.9 trillion won (US$5.3
billion) over the next 14 years to expand the country's natural gas storage and
distribution infrastructure, the government said Monday.
The plan by the Ministry of Knowledge Economy calls for the use of an offshore
gas well as a storage facility for liquefied natural gas (LNG), along with an
increase in the total length of the country's gas pipelines from 2,739 kilometers
to 3,893 kilometers by 2013.
"The plan is geared to meet the country's long-term energy needs and calls for 32
million tons of LNG to be imported in 2022 for use in homes and thermal power
plants from the 26 million tons brought into the country this year," said Vice
Minister Lee Jae-hoon.
South Korea is currently the world's No. 1 importer of natural gas, the majority
of which comes from Qatar, Oman and Malaysia.
Lee said the use of the Donghae gas well, which is expected to halt production
within a decade, could contribute to increasing the country's storage capacity to
24 percent of annual demand in 2017 from around 9.2 percent last year. If
developed as a storage facility, the offshore gas well located 58 kilometers
southwest of Ulsan could hold 1.7 million tons of LNG worth 15 days of supply in
the peak winter months.
Greater storage capacity could help insulate the country from sudden fluctuations
in global fuel prices.
"This facility that may cost around 2.2 trillion won to build can be filled up in
the summer months when demand is low and used in winter," the senior policymaker
said.
Work to convert the well into a storage facility could begin as early as 2014,
with LNG to be pumped into the empty well around 2017.
The official also said that 1.7 trillion won would go into increasing pipelines
to allow more people to use LNG gas by 2013.
Once the project is complete, the official said up to 78 percent of all Koreans,
or 16 million households, would benefit from the cheaper fuel source that has
generally been provided to large urban areas in the past.
Besides these large construction projects, state funds are also to be used to
expand existing LNG storage facilities in Samcheok and Pyeongtaek and expand city
gas services in Paju and Yongin near Seoul.
The ministry in charge of the country's energy policy, meanwhile, said plans to
bring in 7.5 million tons of Russian natural gas annually through pipelines are
progressing as planned, with more cooperative deals being sought with countries
in Central Asia.
yonngong@yna.co.kr
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