South Korea's Korea Midland Power (KOMIPO) has cancelled plans to build a liquefied natural gas (LNG) import terminal on the western coast of the country due to high costs and declining demand for the fuel.
KOMIPO said in a statement to Reuters on Monday that its board had approved the plan to withdraw a LNG terminal construction project in Boryeong on June 28. Construction costs for the project had been expected to rise by about 22% from 732.1 billion won ($527.40 million) to 894.6 billion won.
The company also added that it expected its annual LNG demand to reduce by 67% to 384,000 tonnes.
KOMIPO had decided to build the LNG terminal in 2022, and construction was supposed to start last month, according to Yonhap news agency.
South Korea is the world's third largest LNG importer after China and Japan, and shipped in 45 million tons of the fuel last year, according to data from analytics firm Kpler.
Analysts expect South Korea's LNG imports to remain steady or decline this year as more usage of nuclear power displaces gas.
($1 = 1,388.1400 won)
(Reuters - Reporting by Ju-min Park in Seoul, writing by Emily Chow in Singapore, Editing by Louise Heavens)
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