South Korea's state-owned Korea Gas Corporation reduced its LNG imports by 17.1% year on year in January-June, as domestic sales declined 7.4% over the same period due to an economic slump and higher coal and nuclear usage for power generation, the company said Wednesday.
The world's biggest LNG buyer imported 16.54 million mt of LNG for the first half of the year, compared with 19.96 million mt in the same period of 2014, Kogas said in a statement.
The company did not disclose how much it imported in the second quarter.
But given its Q1 imports of 9.77 million mt, the company would have imported 6.77 million mt in Q2, down 7.9% from 7.35 million mt in the year-ago period.
This marks the fifth consecutive quarter of a year-on-year decline following 0.5% growth in Q1 last year.
Kogas LNG imports fell 22.5% year on year in Q1, 1.5% in Q4 2014, 16.1% in Q3 2014 and 18.2% in Q2 2014.
Kogas imported a total 36.33 million mt of LNG last year, down 7.6% from 39.33 million mt in 2013, the first decline in its annual LNG imports since 2009.
Most of the supply was imported under 16 long-term and three mid-term contracts, the state utility said.
Kogas has term contracts for 10.02 million-11.02 million mt/year from Qatar, 4 million mt/year from Malaysia, 4 million mt/year from Oman, 3 million mt/year from Indonesia, 1.5 million mt/year from Russia's Sakhalin, 1.3 million mt/year from Egypt, 700,000 mt/year from Brunei and 500,000 mt/year from Australia, according to the company.
Kogas plans to import an additional 7.1 million mt/year from Australia from Q3 this year and another 2 million mt/year from early 2018, as well as 3.5 million mt/year from the Sabine Pass terminal in Louisiana from 2017.
Kogas, which has a monopoly on domestic natural gas sales, sold 17.23 million mt of LNG in H1 2015, down 7.4% year on year from 18.61 million mt.
Of this, sales to power generation companies dropped 12.0% year on year to 7.62 million mt in the first-half, compared with 8.66 million mt a year earlier, while sales to retail gas companies for household and business usage fell 3.4% over the same period to 9.61 million mt, compared with 9.95 million mt in the year-ago period.
Kogas blamed the decline in domestic LNG sales to higher use of coal and nuclear for power generation, which were relatively cheaper compared to LNG.
The utility Wednesday also said it recorded a net profit of Won 540.8 billion ($454.5 million) in H1 2015, up 22.3% from Won 442.3 billion a year earlier.
H1 operating profit also climbed up 6.5% to Won 869.1 billion, compared with Won 815.7 billion in the year-ago period.
But sales revenue for the first-half dropped 23.7% to Won 15.18 trillion, compared with Won 19.90 trillion recorded a year earlier.
The revenue fell due to lower LNG selling prices in the domestic market, but net profit rose on a yearly basis largely due to less borrowing costs, a company official said.
The South Korean government has cut retail natural gas prices by 10.3% on average from May 1 to reflect lower LNG import bills on the recent oil price slump, marking the third price cut this year.
The city gas rate was lowered 10.1% in March and 5.9% in January.
The company's debt decreased to Won 31.64 trillion as of end-June, from Won 37.05 trillion at the end of last year.
Its debt-to-equity ratio also fell to 308.6% as of end-June, from 381.0% at end-2014.
Kogas is under pressure from the government to reduce its debt, which has grown after massive overseas projects in the past few years.
The government has called for Kogas to lower its debt-to-equity ratio to 274% by 2017.
Kogas is currently involved in 26 overseas projects in 13 nations, including 10 under development and production and five under exploration.