THE EFFECTS ON LNG IMPORT PRICING SCHEME IN KOREA OF KOVYKTA GAS PROJECT EFFET DU PROJET DE GAZ KOVYKTA SUR LE SYSTEME DU PRIX D'IMPORTATION DE GNL

摘要

Unlike well-developed North American and European natural gas markets, Asian natural gas market still remains the strictest in the world due to remoteness between suppliers and consumers in distance and lack of ample gas resources near major consuming countries of Japan, South Korea, and Taiwan. Recently, however, Asian gas market has been shifting towards more competitive and flexible buyer-oriented market from strict supplier-oriented market, based on a long-term contract. In fact, it was triggered by Guangdong project. The new pricing formula not only increased the stability of LNG price, but also lowered prices to the level that can compete with such competing fuels as fuel oil and coal. Moreover, considering that many both new and renewal contract negotiations in Northeast Asia are centered on 2004~2008, the Guangdong contract would greatly affect existing and new contracts. On the other hand, two gas projects begin in earnest in Northeast Asia. They are Kovykta gas pipeline project and Sakhalin-2 LNG project. In fact, Sakhalin gas is most likely to compete with Kovykta gas due to its close proximity. Therefore, to cope with these rapid changes in Northeast Asia, Kovykta gas has to be priced in a way that can compete with cheaper LNG including Guangdong and Sakhalin as well as alternative fuels such as coal and heavy fuel oil. If Kovykta gas which has its competitiveness over competing fuels is accomplished, it will not only provide an impetus to inter-fuel competition as well as gas-to-gas competition in the Northeast Asian gas market, but also play a role of a catalyst for shifting Northeast Asian gas market to buyers' market for the time being.