IEEE Power & Energy Magazine - November/December 2014 - 67

table 2. South Korean LNG imports,
2012 (source: Korea Trade Association).

Qatar

10.3 (28.4)

9,691 (35.4)

0.941

Indonesia

7.4 (20.6)

5,342 (19.5)

0.722

Oman

4.1 (11.4)

3,968 (14.5)

0.968

Malaysia

4.1 (11.3)

2,309 (5.4)

0.563

Nigeria

1.8 (5)

1,362 (5)

0.757

Yemen

2.6 (7.2)

1,017 (3.7)

0.391

Russia

2.2 (6)

848 (3.1)

0.385

Brunei

0.8 (2.1)

749 (2.7)

0.936

Australia

0.8 (2.3)

612 (2.2)

0.765

Trinidad
and Tobago

0.8 (2.3)

519 (1.9)

0.649

generally leads to low LNG transportation (shipping) costs.
(South Korea has no direct pipeline interconnections with other
countries producing LNG, such as Russia.) Using the assumptions of 0.465 t/m3 for LNG density and 9,500 kcal/m3 for the
lower heating value (LHV) of LNG combustion, the approximate imported LNG thermal unit price in 2012 can be estimated
as follows:
US$0.4-1.0/t x 0.465 t/m3 (LNG density) 9,500 kcal/m3
× 0.252 x 106 kcal/1,000 Btu (MBtu) = US$5-12.33/MBtu.
Recently, however, the actual price of LNG including all
related expenditures has been in the range of US$15-17/MMBtu.

LNG Consumption Amounts,
Users, and Trends
Figures 9 and 10 show the historical town gas consumption
trend and the composition of natural gas consumption by end
users in South Korea, respectively. The highest consumption levels come from industrial and residential/commercial
users. Town gas is used primarily for heating in the residential and commercial sectors.

The Town Gas Price
Historical data about town gas prices in South Korea are
presented in Figure 11. The price has increased threefold
over the last 15 years. This increase in the town gas price
(the price of primary energy or resource energy) has made
it relatively more expensive than electrical energy (which
we call secondary energy). Users, particularly those in the
agricultural sector, therefore prefer to use electrical energy
for heating. The pricing of electricity for industries and
related sectors has recently been receiving serious attention from policy makers. Assuming an LNG thermal rate of
9,500 kcal/m3 and a monetary currency conversion rate of
KRW1,100/US$1, the average domestic retail calorie unit
november/december 2014

Industrial
Residential/Commercial
Transport
Public

20
15
10
5
0

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11

figure 9. Town gas (natural gas) consumption in South
Korea by sector (1981-2011).

2002 14.6 Mtoe

Public
1.8%

Industrial
27.3%
Residential/
Commercial
70.3%

Public
0.7%
Transport
4.9%

Industrial
40.2%
Residential/
Commercial
54.2%

2012 25.4 Mtoe

figure 10. The composition of South Korean natural gas
consumption in 2002 and 2012.

1,000
900
800
700
600
500
400
300
200
100
0

Average
Residential
Industrial
Commercial

87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12

Rate
(US$/t)

(Mtoe)

Cost (Million
US$ and
% of Total
Expenditure)

(KRW/m3)

Imported
Amount
(Billions of t
and % of Total)

25

figure 11. Town gas prices in South Korea, 1987-2012.

LNG price in 2012 can be estimated by using the following
simplified calculation:
KRW870/m3 ÷ 9,500 kcal/m3 ≈ KRW91.5/1 million calories (Mcal) = US¢8.32/Mcal.
Meanwhile, the calorie unit price for LNG imported
recently (during 2014), using a price range of US$15-17/
ieee power & energy magazine

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