South Korea will provide liquefied natural gas (LNG) to Japanese power companies that have been forced to turn off nuclear power plants due to last week's massive earthquake, the government said Sunday.
The Ministry of Knowledge Economy said the state-run Korea Gas Corp. (KOGAS) has decided to divert some LNG shipments that it planned to receive from abroad so they can go to Japan.
The shipments that will be diverted were due to arrive in South Korea this month and in April, the ministry said.
"The decision was made after Japanese power companies asked for a 'swap arrangement' so they can receive more LNG to be paid back at a later date," the ministry said.
It said the amount of LNG to be diverted will not seriously affect South Korea's demand for the fossil fuel resource.
South Korea currently has enough reserves that there should be no short-term problem in its energy sector.
South Korea, however, said that if Japan's electric power shortage is not resolved in the near future, it could affect LNG prices down the road.
If Japan's nuclear power stations, which provide roughly 30 percent of the country's power needs, remain inoperable, the island nation will have to rely more on fossil fuel, which will raise international prices.
KOGAS has set up an emergency response team to examine possible repercussions in both the international and local markets. The government plans to push for expanding the storage capacity for LNG from 7.12 kiloliters as of last year to 15.36 kiloliters in 2024.