S. KOREA'S LNG DEMAND WILL UP

PLATTS - 07 Jun 2021 - South Korea's newest and biggest nuclear reactor that was shut late last month due to a fire would remain closed for a while -- possibly more than a month -- potentially raising LNG demand for power production, energy officials said June 7.

Shin Kori-4, which was shut May 29 after a fire at its turbine, has a capacity of 1.4 GW and started commercial operation in August 2019.

The blaze started from an exciter of a turbine and was extinguished in about an hour. However, the reactor has remained closed for 10 days since then.

"We shut the reactor for safety reasons, and investigation is still underway to find out the exact cause of the fire," said an official at state-owned nuclear power operator Korea Hydro & Nuclear Power Co., or KHNP.

"We cannot say at the moment when the reactor will restart because of ongoing investigation, but downtime can last for a month or longer because we need to replace damaged parts of the reactor," the official said.

KHNP also is required to win approval from the country's nuclear regulator, the Nuclear Safety and Security Commission, before restarting the reactor, according to the official.

The month-long shutdown of Shin Kori-4 would reduce the country's nuclear availability and raise LNG demand for power production during the peak summer demand season, according to the Ministry of Trade, Industry and Energy, or MOTIE.

The MOTIE said the country will be ready to raise operating ratios of natural gas-fired power plants to avoid any electricity supply disruptions in summer.

S Korea's LNG demand has been on the rise on hopes of a postpandemic economic recovery as well as the shutdown of a few nuclear reactors.

State-owned Korea Gas Corp.'s LNG sales jumped 22.4% year on year at 2.769 million mt in April, which marked the biggest increase in three years since April 2018. Kogas' LNG sales in January-April rose 13% year on year at 13.174 million mt.

To meet the growing LNG demand, South Korea increased imports of the super-chilled fuel by 7.3% year on year at 16.636 million mt for the first four months of this year.

LNG inventories

The government has decided to revise LNG inventory rules so that the country can hold more stockpile as part of efforts to maintain a stable LNG supply amid uncertainties in global prices, according to a senior official at the MOTIE.

"Under a draft plan, Kogas should reserve nine days' worth of LNG, compared with the previous guideline of seven days," the MOTIE official said.

The revision is also aimed at better preparing for an unpredicted heat wave or a cold spell, which typically leads to higher LNG demand for power production, the official said, adding that the revision is expected to be finalized by the end of July.

The government also seeks to exclude the "dead stock" when calculating inventories, which normally takes up 5% of LNG saved in a single tank, so as to increase the country's actual LNG stockpile, according to the official.

Nuclear shutdowns

Seven nuclear reactors with a combined capacity of 7.4 GW, including Shin Kori-4, are currently offline for maintenance or malfunction -- comprising 31.8% of the country's overall capacity of 23.25 GW across 24 nuclear reactors. This was up from the shutdown of five reactors with a capacity of 4.95 GW in January-March.

The unplanned shutdown of Shin Kori-4 came less than four months after it restarted Feb. 5 from a four month-long regular maintenance since Oct. 9, 2020.

Construction of Shin Kori-4 with a design lifespan of 60 years started in September 2007 and was originally scheduled to start up late 2014. However, it was delayed by almost five years due to toughened safety guidelines in the wake of a series of major earthquakes in the country.

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