Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
KOMIPO pioneers direct LNG import to boost price competitiveness
Korea Midland Power (KOMIPO) Global Managing Director Cho Hang-sung speaks to reporters at the company's office in Singapore, July 3. Joint Press Corps
By Lee Gyu-lee
SINGAPORE — KOMIPO Global, the overseas subsidiary of Korea Midland Power (KOMIPO), has become a trailblazer in Korea’s power generation sector by breaking away from the traditional Korea Gas Corp. (KOGAS) supply model and pioneering direct liquefied natural gas (LNG) procurement since 2015.
Established in 2007 to oversee the company’s global business, KOMIPO Global jumped into the LNG procurement business in 2015 by leveraging its corporate base in Singapore, an LNG trading hub of the Asia-Pacific region.
“KOMIPO Global’s role is to shield our headquarters from direct exposure to overseas business risks while ensuring efficient management and control of our international operations,” Cho Hang-sung, managing director of the company, told The Korea Times at its office in Singapore on July 3.
“This strategic positioning (in Singapore) enables us to maximize operational efficiency and capitalize on the benefits offered by the country as a financial and energy hub.”
Singapore has over 50 global LNG suppliers and trading houses operating in the city-state, offering unparalleled access to market information and networking opportunities.
Since beginning in 2015, it has accumulated savings of over 1.17 trillion won ($856.8 million) as of last December, according to KOMIPO. Last year, it also recorded the highest LNG-based power sales volume among Korea’s five major power companies.
However, despite its success, becoming the first Korean power company to implement direct LNG procurement and navigating Singapore's tight-knit LNG network weren’t easy.
Initial years were marked by challenges to establish credibility among existing global players and networking to integrate into the so-called inner circle of LNG trading.
“When our first LNG procurement specialist was dispatched here in 2015, the market was very much a seller’s market. Suppliers would ask, ‘Do you have credit? Can you actually pay?’ So, at first, when we put out spot tenders (to purchase), it would often fail because no one would join,” said Yun Deuk-hee, KOMIPO Global deputy managing director.
“We had to be physically present here, making promotional materials and going around asking to participate in our tenders. It took repeated outreach, consistent participation in tenders and building a reputation for reliability before we began to be recognized as a serious buyer.”
An illustrator of a combined cycle power plant in Boryeong, which is currently under construction / Courtesy of KOMIPO
She added that after a decade, the company settled into the market as a reliable buyer.
“Sellers see us as a highly reliable buyer because our credit is strong and our payments are always made promptly without any delays. This has helped us establish a reputation as a stable and trustworthy partner in the market,” she said.
“Leveraging our status as a state-owned company, we maintain a stable presence in the market; regularly participating in transactions whenever the opportunity arises, consistently showing up and keeping our face known.”
Over the past decade, KOMIPO Global has executed about 44 spot contracts and two mid to long-term contracts, demonstrating a diversified and resilient approach to fuel sourcing.
Looking forward, the company is preparing to further expand its direct LNG procurement to its power plant in Korea.
“A combined cycle power plant in Boryeong, South Chungcheong Province is under construction now and there will be another one in Haman, South Gyeongsang Province. So we expect to see increased demand from 2027 onwards,” Yun said.