* S.Korea's gas demand seen topping 45 mln T LNG by 2020
* Wants to cut spot, short-term supply to 5 pct from 20 pct
* KOGAS, Japan cos to co-procure if more gas offered in Asia
(Recasts with CEO's quotes)
By Meeyoung Cho
GOYANG, South Korea, March 25 Korea Gas Corp
(KOGAS) is considering investing more in
unconventional gas fields including shale assets and plans to
procure more of the fuel via long-term contracts, as it gears up
to meet double-digit growth in South Korea's gas demand by 2020.
State-run KOGAS, the world's largest corporate buyer of
liquefied natural gas (LNG), and other Asian buyers are securing
gas supplies to meet demand from electricity producers and
industrial manufacturers in their fast-growing economies.
South Korea's natural gas demand will top 45 million tonnes
by 2020, from just under 41 million tonnes of LNG equivalent
estimated this year, Jang Seok-hyo, president and chief
Executive of KOGAS, told media on the sidelines of an
international gas conference.
South Korea imported 39.9 million tonnes of LNG last year,
according to the country's customs data.
KOGAS now procures a combined 20 percent of its gas demand
in the spot and short-term supply market, Jang noted, adding it
wants to reduce the proportion to 5 percent to lower price and
"On average, spot gas prices have cost 10 percent more than
long-term supply, although spot prices were not always
costlier," Jang said. "I think it is better to reduce spot and
short-term procurement proportion to stabilise the supply."
KOGAS is also eyeing tapping unconventional gas fields to
procure an additional 7 million tonnes a year by 2020, Jang
On possible joint procurement to raise competitiveness, Jang
said KOGAS has fundamentally agreed with Japanese firms to buy
together without competing over prices, if additional gas is
available. He did not elaborate.
The head of state-run Japan Oil, Gas and Metals National
Corp had said that KOGAS and a Japanese company bought natural
gas jointly on Monday. Jang and other KOGAS officials, however,
denied the deal.
(Editing by Tom Hogue and Muralikumar Anantharaman)