South Korean state utility suppliers are eagerly seeking out alternative fuel sources after Russia announced to ban exports of materials and commodities to countries who have joined U.S.-led sanctions for its invasion of Ukraine.
Korea Natural Oil Corporation (KNOC) and public power generators under Korea Electric Power Corporation (KEPCO) fret disturbance in supplies as they rely on bituminous coal imports from Russia.
Korea Midland Power imported 19.455 million tons last year, followed by Korea Western Power with 16.465 million, Korea East-West Power 12.365 million tons, and Korea Southern Power with 9.035 million. Russian share in imported soft coal for power generation ranges from 6.5 percent to 17 percent.
Bituminous coal makes up 89.9 percent for Korea South-East, 72.1 percent in case of Korea East-West, 67.2 percent for Western Power, 65.6 percent for Central Power, 65.4 percent for Southern Power. The coals are mostly imported from Russia, Australia, and South Africa.
Prices have been running high due to shortage of products following Russian ban, weighing further on the bottom line of energy companies with KEPCO looking at a yawning deficit of 30 trillion won for this year.
Suppliers meanwhile are eagerly seeking out countermeasures.
KNOC won the rights to explore two minefields on the southern continental shelf of Korea, close to Donghae-1 gas field.
Five public power generators under KEPCO are directly seeking supplies instead of going through Korea Gas Corp. to save cost.
Korea Midland Power acquires 38 percent of its natural gas use from overseas suppliers, such as Dutch energy and commodity trader Vitol and Malaysian oil and gas firm Petronas. It gained 300 billion won ($235.6 million) in operating profit last year backed by the direct imports. Korea East-West Power has recently signed contracts with American and Russian firms to buy 300,000 tons of natural gas per year. Other public firms are also in talks with overseas gas providers.
By Song Gwang-sup and Jenny Lee
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