Multiple preferred bidders selected: Final contracts expected by June Next Year

Ahead of the second Trump administration, Korea Gas Corp. (KOGAS) is accelerating its efforts to import U.S. liquefied natural gas (LNG).

According to the Ministry of Trade, Industry, and Energy (MOTIE) on Dec. 18, KOGAS has selected multiple U.S. companies as preferred bidders for LNG imports this month. The corporation plans to sign a memorandum of understanding covering key terms by June next year. Once negotiations on these terms conclude, the process for final contracts will begin.

Expanding U.S. energy imports has been under serious consideration by trade authorities since Trump’s election victory last month. The MOTIE believes that the second Trump administration may impose trade pressures on South Korea due to its trade surplus and sees increasing U.S. energy imports as an effective means to alleviate such pressure. Recently, MOTIE Minister Ahn Duk-geun indicated that U.S. energy imports are more cost-effective than Middle Eastern sources, suggesting room for both public and private sectors to increase imports. Last year, South Korea imported 13.5 percent of its crude oil and 11.6 percent of its gas from the United States.

However, U.S. energy imports have higher logistics costs and longer transport times compared to Middle Eastern sources. To address this, KOGAS plans to diversify its supply chain by including U.S. LNG in new long-term contracts. The corporation’s long-term contracts with Qatar and Oman, covering 8.98 million tons annually since the 1990s, are set to expire at the end of this year. A KOGAS official explained, “Importing U.S. LNG can also increase our negotiating power with existing suppliers.” An industry insider noted, “This can effectively be seen as a signal to expand energy imports from the U.S.”

Source : Businesskorea