South Korea's liquefied natural gas import map is shifting rapidly as the war in the Middle East drags on. LNG imports from the Middle East plunged more than 60% this year from a year earlier, while shipments from North America more than doubled.
South Korea imported 32.87 million tons of LNG in the first nine months of this year, down 6.4% from the same period a year earlier, according to the Korea International Trade Association on the 17th. Imports from the Middle East came to just 2.42 million tons, a 66.2% drop from a year earlier. Volumes from Latin America and Europe also fell, to 1.37 million tons and 1.42 million tons, down 17.8% and 12.7% respectively.
Among Middle Eastern suppliers, the decline was steepest for Qatar. Imports of Qatari LNG totaled 1.7 million tons in the January-September period, down 68.6% from a year earlier. No shipments arrived at all from April through June or in August and September.
Qatar was South Korea's third-largest LNG supplier last year after Australia and Malaysia, and its supply difficulties stemming from the regional conflict have fed through to Korean imports.
Shipments from North America climbed sharply even as Middle Eastern volumes shrank. LNG brought in from North America over the same period reached 7.82 million tons, up 102.9% from a year earlier. Imports from the United States rose 41.7% to 4.85 million tons, while Canadian volumes surged 587.6% to 2.97 million tons. The government has said it moved pre-emptively to secure replacement cargoes from the U.S. and Southeast Asia in anticipation of disruptions to Middle Eastern supply.
Still, supply uncertainty is expected to persist for some time, with no clear timeline for the normalization of Middle Eastern LNG output and winter heating demand now building. International LNG prices are also under upward pressure as countries compete for replacement volumes.
The Japan-Korea Marker, the benchmark for East Asian LNG, averaged $22.00 per million British thermal units in August, up 15.2% from the previous month, according to the Korea Energy Economics Institute. The Dutch Title Transfer Facility price, the European natural gas benchmark, rose 17.1% to $21.20.
The government plans to accelerate efforts to diversify its roster of suppliers to strengthen the stability of the LNG supply chain, and to expand the share of medium- and long-term contracts to limit the impact of swings in international prices.