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.
LNG reemerges as strategic fuel for Korea's AI, chip ambitions
Hanwha Ocean's liquefied natural gas carrier / Courtesy of Hanwha Ocean
By Lee Gyu-lee
Liquefied natural gas (LNG) is regaining strategic importance as the government reassesses its energy mix to support massive investments in artificial intelligence (AI) data centers and semiconductor manufacturing, while a prolonged global boom in LNG strengthens prospects for the country's broader LNG supply chain.
Seoul is reconsidering LNG's domestic role after previously planning to reduce its share in the country's power mix under long-term decarbonization targets.
Growing electricity demand from AI infrastructure and semiconductor manufacturing has renewed focus on LNG-fired power generation as a flexible backup source to balance the intermittency of renewable energy.
The government is expected to consider a sharp increase in the share of LNG power in a new electricity plan, which will be drawn up later this year. It is also said to be reviewing a proposal to meet part of Samsung Electronics and SK hynix’s planned semiconductor cluster’s 6.3-gigawatt power demand in the southwestern region with LNG combined-cycle plants.
Executives have also called for greater policy support for LNG alongside nuclear power.
"We ask (the government) to actively pursue an expansion of nuclear power and power purchase agreements to offset the intermittency of renewable energy, and make sure that LNG cogeneration projects also go ahead," Samsung Electronics Vice Chairman Jun Young-hyun said during a recent event to announce the government-led semiconductor investment plans.
The renewed focus on LNG is also expected to support demand for LNG carriers, creating opportunities for the country's shipbuilders. The industry expects demand for LNG carriers to remain robust through at least 2032, driven by a new wave of export projects led by the United States and replacement demand for aging vessels.
DS Investment & Securities reported that LNG export terminals under construction, along with projects expected to reach final investment decisions in 2026 and 2027, are likely to drive demand for more than 90 new LNG carriers a year through 2032.
About 120 aging steam-turbine LNG carriers are also set to be phased out, lifting annual demand to roughly 90 to 110 vessels.
The brokerage said further expansion of Qatar's LNG projects and long-term supply agreements could extend the cycle beyond five years, supporting steady orders for Korea's major shipbuilders including HD Hyundai Heavy Industries, Samsung Heavy Industries and Hanwha Ocean.
The stronger outlook is also expected to lift companies across the LNG value chain. Rising LNG carrier orders are boosting demand for cargo containment systems and cryogenic insulation from firms such as Korea Carbon and Dongsung Finetec, while continued investment in LNG infrastructure is set to create more work for engineering, equipment and gas-fired power companies.