SK E&S to Import Low-cost Shale Gas from the U.S.

SEOUL, KOREA- SK E&S Co., Korea's leading retail gas company, said on September 9 that it had signed a deal to import shale gas from the United States. The Korean company agreed on the same day with Freeport LNG Development, the U.S. company operating an LNG receiving and regasification terminal in Freeport, Texas, to use the latter's liquefaction facility for shale gas.

Under the terms of the contract, Freeport LNG will allow SK E&S to liquefy 2.2 million metric tons of gas a year for 20 years from 2019 to 2039. An SK E&S official said, "The volume that we will bring in from Freeport LNG accounts for about 6 percent of Korea's total annual LNG imports. Securing sources of low-cost shale gas has the effect of diversifying import sources of natural gas." Currently as much as 90 percent of natural gas comes from the Middle East and Southeast Asia.

For the past few years, U.S. shale gas producers and distributors have increased their gas shipments significantly. But they are experiencing a bottleneck problem of not enough liquefaction capacity. Currently the only Korean gas company importing shale gas from the United States is Korea Gas Corp.

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