LNG storage tanks at Korea Gas Corporation's Incheon production base in Songdo, Incheon — the country's largest LNG storage facility — are visible from a port in Danwon-gu, Ansan. [Yonhap]
LNG storage tanks at Korea Gas Corporation's Incheon production base in Songdo, Incheon — the country's largest LNG storage facility — are visible from a port in Danwon-gu, Ansan. [Yonhap]

The government has finalized the 16th Long-Term Natural Gas Supply and Demand Plan, laying out the country's natural gas strategy for the next 13 years. While demand for liquefied natural gas (LNG) in power generation is expected to fall as nuclear and renewable energy capacity expands, the plan calls for boosting reserves, diversifying import sources and expanding supply infrastructure to prepare for rising electricity demand driven by AI data centers, semiconductor clusters and other advanced industries.

The Ministry of Trade, Industry and Energy confirmed and published the 16th Long-Term Natural Gas Supply and Demand Plan on Monday, covering demand forecasts and strategies for LNG procurement, supply management and infrastructure development from 2026 to 2038.

Baseline natural gas demand is projected to fall from 45.91 million tons this year to 41 million tons in 2038, an average annual decline of 0.94 percent. The drop reflects a projected decrease in power-generation demand — from 22.35 million tons this year to 12.84 million tons in 2038, an average annual decline of 4.51 percent — based on the 11th Basic Plan for Electricity Supply and Demand announced last year.

To help stabilize volatility in power-generation gas demand, the Ministry of Trade, Industry and Energy introduced a separate supply management demand forecast alongside the baseline figure. This measure incorporates factors such as GDP, temperature and the utilization rate of base-load power generation, and serves as the benchmark for LNG procurement volumes, storage facilities and pipeline infrastructure. Supply management demand is projected to edge up from 47.62 million tons this year to 47.67 million tons in 2038, an average annual increase of just 0.01 percent — in effect holding steady at current levels.

Changes in power-generation gas demand stemming from three major megaprojects — semiconductors, physical AI and AI data centers — will be incorporated into a revised supply plan once the 12th Basic Plan for Electricity Supply and Demand is finalized. Additional demand is expected to be reflected given that an LNG power plant is planned for the Honam semiconductor cluster.

Demand for city gas is forecast to rise from 23.56 million tons this year to 28.16 million tons in 2038, an average annual increase of 1.5 percent.

The government also plans to strengthen the national natural gas stockpiling system to guard against uncertainty in international energy markets.

To reduce dependence on any single region, the plan calls for diversifying import sources. The share of LNG from the Middle East is to be brought down to the low 10-percent range by 2038, while the share from the United States is to be expanded to around 30 percent. The Middle East's share has already fallen from 53.2 percent in 2014 to 37.4 percent last year.

To mitigate the risk that long-term contracts pose when LNG prices cannot be reflected in a timely manner, the plan calls for building a diversified contract portfolio — combining long-term, short-term, medium-term (five to 10 years) and spot contracts. As the share of direct LNG imports grows, the government will also strengthen cooperation between Korea Gas Corporation and private direct importers to promote market competition.

Supply infrastructure will also be expanded. To underpin stable natural gas supply, the government plans to secure up to 8.87 million tons of storage capacity and build an additional 564 kilometers of main natural gas pipelines by 2038, ensuring supply facilities are expanded in a timely manner.


oskymoon@heraldcorp.com