One of the world’s leading LNG buyers, Korea Gas Corp (KOGAS), may be interested in taking part in U.S. shale gas projects as leverage against potential trade pressure from the new U.S. Administration, the South Korean company’s chief executive said on Friday.
“U.S. trade pressure is likely to increase, but U.S. gas investments can work as a tool against trade pressure,” Reuters quoted KOGAS chief executive Lee Seung-hoon as saying at an event today.
“Securing U.S. shale gas is crucial because it’s an important resource,” the manager noted.
In one of his first actions as U.S. President, Donald Trump issued a memorandum to withdraw the United States from the Trans-Pacific Partnership Negotiations and Agreement. President Trump has also criticized on many occasions Japan and China over their trade policies.
At some point in the future, South Korea may import LNG from both the U.S. and Iran without “destination restrictions”, Lee said. But Iran does not have LNG export infrastructure, so this should not be of immediate concern either for South Korea or the U.S.
Although South Korea is the world’s second-largest LNG importer behind Japan, its LNG demand this year is expected to stay flat compared to last year at around 30 million tons, Lee told Reuters.
The manager’s comments today are not the first suggestion that South Korea would be wise to invest in the U.S. shale patch.
Just after the U.S. presidential election in November, South Korea’s deputy Energy Minister Woo Tae-hee advised private energy businesses in the country to invest more in U.S. oil and gas exploration projects. The Trump presidency will greatly increase the uncertainly in global energy markets, and in order to minimize the adverse effects of this heightened uncertainty, South Korean businesses would do well to up their spending on exploration in the shale patch, as output from US shale is expected to rise under the new regime, the official said back then.
By Tsvetana Paraskova for Oilprice.com