South Korea will triple its crude imports from Canada this year and boost LNG purchases from Canadian export projects in the coming years as the Asian economy looks to diversify energy supply amid the massive oil and gas supply shock in the Middle East.
Canada and South Korea on Tuesday agreed to expand their commercial relationship in energy and natural resources during a meeting in Ottawa between Canada’s Minister of Energy and Natural Resources, Tim Hodgson, and Kang Hoon-Sik, the Republic of Korea’s Chief of Staff to the President and Special Envoy for Strategic Economic Cooperation.
Korea is ramping up imports of LNG from Canada, where the Korea Gas Corporation remains a key investor in LNG Canada Phase I and a prospective partner for Phase II. A final investment decision for Phase II is expected later this year, after recent progress was made by the Governments of Canada and British Columbia.
Once the decision is made and LNG Phase II enters full production — which is expected in the early 2030s —Korea plans to import at least 1.4 million tons of Canadian LNG annually for more than 30 years, the government of Canada said.
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Korea also plans to significantly increase imports of Canadian crude oil, Canada added.
South Korea’s Industry Ministry, for its part, said that the Asian economy would more than triple imports of Canadian crude oil from 4.88 million barrels in 2025 to as much as 16 million barrels in 2026.
Korea will also explore ways to increase imports of Canadian crude to as much as 20 million barrels annually.
“In this case, Korea would emerge as Canada’s third-largest destination for crude oil exports after the United States and China,” the ministry said in a statement carried by The Korea Herald.
South Korea has turned to alternative suppliers amid the crippled deliveries from the Middle East. South Korea in April secured 273 million barrels of Middle Eastern and Kazakh crude that will not need to transit the Strait of Hormuz—volumes that would sustain its economy for more than three months.
Boosting energy cooperation with Canada will further diversify South Korea’s crude imports as well as Canada’s oil export destinations.
By Michael Kern for Oilprice.com
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