'Gastech expo to show future of gas industry'
By Choi Kyong-ae
Jang Seok-hyo KOGAS President & CEO
Korea Gas Corp. (KOGAS) will use the Gastech Conference to showcase its present and future as well as exchange ideas among members of the global gas industry, according to the company’s chief executive.
“In the upcoming global gas conference, we are planning to promote our global networks and dominant position in Korea as the exclusive gas provider for the past three decades,” KOGAS President and CEO Jang Seok-hyo told The Korea Times, Tuesday.
At Gastech, the state-run company will explain its leading role in the spread of natural gas use, and its expansion into developing countries, the CEO said.
“Countries such as Mozambique do not have gas pipelines, the prerequisite for the use of gas. We are targeting to win orders to build gas infrastructure and gas storage facilities in those countries,” Jang said.
Global energy majors such as Shell, Chevron and Exxon Mobil Corp. are scheduled to exchange views and discuss ways to tackle challenges at Gastech, while promoting the gas industry amid the prolonged economic slump.
Since 1972, the Gastech Conference and Exhibition has been held every 18 months mainly in Europe, the U.S. and the Middle East. Korea is the first country in Northeast Asia to hold the event. Previously, Thailand and Malaysia in Southeast Asia were hosts.
Jang said, “Two thirds of liquefied natural gas (LNG) produced globally are consumed in Northeast Asia, home to major economies such as Japan, Korea and Taiwan.”
KOGAS will host the Gastech conference at the KINTEX near Seoul from March 24 to 27. Gastech is one of the world’s three biggest energy conferences along with the World Gas Conference and the LNG Conference.
Some 2,000 energy experts and companies are expected to discuss a broad range of issues involving the industry, according to the company.
High-profile participants include Paul Sullivan, global director of LNG & FLNG at Worley Parsons; Roger Bounds in charge of global LNG operations at Shell Upstream International; LNG and FLNG Director Steve Coulom at Chevron Global Gas; and Executive Vice President Shigeru Muraki at Tokyo Gas.
Issues to be discussed during the conference are ensuring stable supplies, developing gas-related infrastructure and technologies, and boosting the gas trade and shipping in Asia, KOGAS said.
For stable supplies, Jang said KOGAS will sharply reduce its heavy reliance on short-term contracts or purchases on spot markets.
Instead, it will seek import diversification to be less exposed to price volatility and market uncertainty. Korea currently buys more than 50 percent of its natural gas from Middle Eastern countries such as Qatar, Oman and Yemen.
“We expect the country to be short of 7 million to 8 million tons of natural gas in 2020. So balancing between supply and demand is our priority,” the CEO said. KOGAS will share information with domestic energy companies such as SK Innovation and GS Caltex to calculate the total gas reserves the country has, he added.
As KOGAS’s long-term supply contracts with Oman and Qatar end in 2024, the company said it will find new suppliers in a diversification strategy.
KOGAS, the world’s biggest LNG buyer, bought 39 million tons in 2013, spending nearly 90 percent of its revenue of 38 trillion won ($36 billion) for the whole of last year.
At Gastech, Jang plans to underline that natural gas still has big growth potential globally.
“Many people say fossil fuels are drying up. They regard natural gas as a transfer energy which plays a bridging role between fossil fuels and hydrogen. But that is not true,” said Jang.
“Natural gas is not a transfer fuel but a destination fuel.”
Meanwhile, KOGAS is stepping up efforts to reduce its snowballing debts over the next four years.
The company plans to raise 10.5 trillion won by reorganizing businesses, selling domestic and overseas assets and cutting other costs by 2017. It will use all the funds to pay back debt.
KOGAS posted 203.6 billion won in net losses last year, shifting from a net profit of 362 billion won in 2012.