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South Korea keeps 30pc of nuclear capacity shut

26 Sep 2016 11:49 (+01:00 GMT)
South Korea keeps 30pc of nuclear capacity shut

Singapore, 26 September (Argus) — Some eight out of a total of 21 nuclear units operated by South Korea's Korea Hydro and Nuclear Power (KHNP) still remain off line, removing 30pc of the country's nuclear generation capacity of 21,716MW. The continuing loss of nuclear power could force the country to seek additional LNG supplies to compensate.

The nuclear units have been shut for two weeks, following an earthquake that hit the country on 12 September. The duration for which the reactors will be shut is unclear, while KHNP could not be reached for comment.

KHNP manually shut the No.1-4 units at the Wolsong plant, with a total capacity of 2,779MW, as a precautionary measure following the earthquake. It shut four other plants, comprising the 650MW Kori, 1000MW Shin Kori 2 unit, the 1000MW Hanul 4 unit and the 950MW Hanbit 2, as part of a "planned accident prevention" check.

Nuclear power accounts for around 30pc of South Korea's fuel mix and could lead to demand for other fuels including LNG.

State-owned aggregator Kogas may be seeking 10 cargoes for delivery in December-February from term suppliers to meet winter demand and possibly the shortfall in nuclear generation capacity.

Kogas has been out of the spot LNG market for much of this year, apart from a tender in April in which it sought to buy six cargoes for delivery between June 2016 and February 2017. Private-sector buyer SK and state-owned Posco bought a spot cargo jointly through a tender but this was for delivery at the end of April, while Posco and fellow state-owned firm Komipo secured a cargo together via a tender for a mid-June cargo.

Spot LNG prices are on the rise for October–December deliveries, supported by recent transactions and strong portfolio supplier demand for optimisation and to backfill cargoes into northeast Asia and the Middle East.

The ANEA, the Argus assessment for deliveries to northeast Asia, was assessed today at $5.96/mn Btu for second-half October deliveries, $6.08/mn Btu for both halves of November and $6.16/mn Btu for first-half December.