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South Korea's August LNG imports dip 22% on year to 2.54 mil mt

https://www.chemnet.com   Sep 17,2014 Platts
South Korean LNG imports in August were 22% lower year on year for the sixth straight month, at 2.54 million mt, customs data released Monday, September 15, by the Customs Service showed.

August imports increased 17% from June, which were the lowest imports since August 2011, Platts data showed.

South Korea has had lower domestic demand for LNG, following a warm winter and cool summer, which has resulted in a high inventory build.

As Kogas was still scheduled to receive more LNG from term contracts with its long-term suppliers, the monopoly LNG buyer has had to find ways to manage its terminal operations, while balancing the need to keep its relationships with key producers intact.

This year, Kogas was heard to be using a combination of downward tolerance clauses and deferral of volumes in long-term contracts, as well as utilizing time swaps with other North Asian buyers, to help them deal with their high inventories.

"I'm not too sure [how they have managed to deal with their situation], but I think they are managing it pretty well," a Singapore-based trader said.

Sources have recently said that Kogas was able to fix its delivery schedule for September and October, though it was unclear whether it would need to reschedule some of its shipments in November and December.

Kogas' imports from Indonesia, Malaysia, Oman, and Yemen were down 22%, 64%, 14%, and 36%, indicating that it was successful in deferring some cargoes from its long-term suppliers.

After four months of declining year-on-year volumes, imports from Kogas' largest long-term producer, Qatar, finally showed signs of recovery, with imports rising 17% on the year, and 23% from the previous month to 950,093 mt.

Qatar has previously borne the brunt of declining demand from Kogas, with exports from the Middle Eastern country so far this year down around 1.8 million mt, Platts data showed.

South Korea's LNG import prices averaged $842.25/mt ($16.20/MMBtu) in August, down 0.8% from July, but 10% higher year on year.
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