South Korea will receive its first shale gas cargo from the United States next month, a move that is expected to help reduce the country’s hefty reliance on Middle Eastern fuel and alleviate the trade deficit with the U.S.

State-run Korea Gas Corp. (KOGAS) said on Monday that the first cargo will arrive in the southern port of Tongyoung in July, under the 2012 deal with Texas-based Cheniere Energy Inc. to import an annual 2.8 million tons of liquefied natural gas (LNG) for 20 years. This would make Korea the first Asian country to bring in U.S. shale gas.

On Sunday (local time), a ceremony was held to mark the launch of Korea-bound LNG cargo at Cheniere’s Sabine Pass export terminal in Louisiana.

KOGAS expects the deal would help reduce Korea’s heavy energy dependency on the Middle East. The company will also be better able to adjust to changes in domestic demand as U.S.-originating LNG can be freely traded unlike LNG from the Middle East that cannot be resold.

The shale gas import from the U.S. is also expected to help ease U.S. concerns over its trade deficit with Korea, a reason that prompted U.S. President Donald Trump to revisit the bilateral free trade agreement.

Further increase in U.S. shale gas imports could be included in a gift package from Korean President Moon Jae-in in his first visit to Washington and summit with Trump later this week. Lee Seung-hoon, CEO of KOGAS, is the only member from a state utility company to join the Moon entourage.

U.S. shale gas would be transported to Korea via six new LNG carriers, constructed under the order of KOGAS in 2015 by two Korean shipbuilders. Three local shipping companies would be in charge of their operation.

By Ko Jae-man

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]