|Korea Gas Corporation headquarters in Daegu / Courtesy of KOGAS|
By Kim Hyun-bin
The Korea Gas Corporation (KOGAS) is scheduled to apply a customized LNG rate plan for power generation companies starting in 2022. To better implement the changes, KOGAS has gone through structural reforms earlier this year to better satisfy clients' needs as well as forming a consultative body involving interested parties to discuss the problems and improve the set measures.
The move follows the previous rate plan, which provided an average rate for all client companies, was deemed unfair.
Last October, KOGAS and the Korea District Heating Corp. signed a contract to distribute 400,000 tons of natural gas from three newly built cogeneration power plants (in Yangsan, Daegu and Cheongju) for the next 15 years.
KOGAS won the contract with its abundant experience and expertise, supply stability, global networking and price competitiveness.
Apart from the contract with the Korea District Heating Corp., KOGAS is under negotiation to implement the customized rate plan with 10 other power generation companies to introduce cheaper LNG prices.
The customized rate initiative aims to enhance convenience and benefits to the public while contributing to the safe management of natural gas supply and demand.
Through energy transition policies in recent years, demand for LNG has been on the rise, but the previous government's integrated management system of LNG ― as well as fair competition issues ― have been under question as it implemented an average rate for power generation companies, no matter the circumstance.
Unlike the former rate plan, which averages the cost of all LNG contracts with KOGAS and supplies them at the same price to all power generation companies, the customized rate plan expands the options for power generation companies and provides prices that are more catered towards each individual company's needs.
When companies select their LNG supplier, the new measures provide the opportunity to select from among numerous gas suppliers. Once a company has requested a gas supply, KOGAS will meet the respective company's requested conditions and connect it with a firm that best suits its needs.
The new measures will also provide supply tank and piping services along with the LNG.
Since last year, KOGAS has increased its staff handling the initiatives and brainstormed ways to launch the new customized rate plan through numerous discussions involving a consultative group. The new measures will be officially implemented Jan. 1, 2022.
Through the customized rate plan, KOGAS will be better able to systematically manage the supply of LNG and able to manage reserve stockpiles to better counter sudden rises in LNG demand as well as emergency situations.