S.Korea LNG inventory seen at near 3.5 mln T by mid-November

South Korea's liquefied natural gas (LNG) inventory stood at over 3 million tonnes as of Tuesday, and the world's second-largest LNG importer plans to build nearly 3.5 million tonnes

of inventory by mid-November for winter demand, a government source said. Earlier, state-run Korea Gas Corp (KOGAS) said it had sold gas equivalent to 1.95 million tonnes of LNG domestically in September, up 15.8 percent from a year earlier and led by strong demand for power generation. The amount was equivalent to 86.3 billion cubic feet of natural gas. "The inventory will gradually grow until mid-November to reach nearly full storage capacity," the source told Reuters by phone. The stock build will be mostly from supplies under long-term contracts, said the source, who declined to be identified as they were not authorised to talk to the media. KOGAS said last month that its LNG inventory would stand at an estimated 2.26 million tonnes by year-end and 2.77 million tonnes by end-September to meet seasonal winter demand. It added that it would "flexibly purchase short-term and spot LNG cargoes to ensure stable winter supplies." At the end of this month, the government which is currently running an unofficial task force team to monitor LNG supply from November through March, plans to unveil the exact volume to be supplied through spot markets to meet winter demand, according to the source. The Korean government is also running a task force team to check on power supply during the winter after last month's severe power cuts which mainly affected residential areas and led Minister of Knowledge Economy Choi Joong-kyung to offer his resignation. South Korea's gas sales have been robust year-on-year, led by demand for power generation. Of total domestic sales in September, 1.1 million tonnes were for power generation, up 22 percent from a year ago, while the remainder went to household and business consumption, up 8.8 percent, KOGAS, the world's biggest corporate buyer of LNG and South Korea's sole wholesaler, said in a filing with the stock exchange. South Korea raised domestic gas rates by 5.3 percent on average on Monday in a move to reflect higher import costs of liquefied natural gas (LNG) and help cut losses in state-run KOGAS.
Source: Reuters