With the military confrontation between the United States and Iran showing signs of dragging on and putting global energy supply on alert, warnings of supply disruptions and inventory shortages are also mounting in the liquefied natural gas market. As blockades of key shipping routes overlap with Europe's scramble for winter volumes, attention is turning to Korean companies that moved early to secure stakes in overseas gas fields rather than relying on imports alone.
According to the energy industry and foreign media on the 19th, the escalating conflict between the United States and Iran has prolonged shutdowns of major Middle Eastern pipeline operations and maritime navigation. Compounding the situation are the fallout from the strike on Qatar's Ras Laffan gas field, QatarEnergy's extension of its force majeure declaration on supply, and surging power demand from artificial intelligence data centers, pushing the global race for gas to an extreme. Storage facilities in the European Union are reported to be only 65% full, a record low. That is far below the average of recent years, and filling them to the minimum target of 75% alone is estimated to require more than 7 billion euros in additional costs. If Europe turns to aggressive spot purchases ahead of a winter of surging heating demand, a fight over volumes with Asian countries appears unavoidable.
Against that backdrop, deals in gas field development projects worldwide totaled $32 billion in the first half of this year, the most in more than a decade. Gas field assets are changing hands at an average premium of 21% above valuations estimated by energy consultancy Wood Mackenzie.
With competition for energy intense enough to attach hefty premiums to resource development, early equity investments in Korea, led by SK Innovation E&S, are drawing renewed attention. The leading example is the Barossa gas field project in Australia. SK Innovation E&S entered the venture in 2012 and led the entire development process, from reserve assessment to facility construction.
Gas fields typically take more than a decade to move from exploration to commercial production and require large amounts of capital and risk-taking, making the field difficult for private companies to enter. On the strength of its 37.5% stake, alongside Australia's Santos with 50% and Japan's JERA with 12.5%, SK Innovation E&S has secured a stable 1.3 million tons of LNG a year.
The real value of the Barossa investment lies in procurement stability. Spot purchases can see costs snowball when market prices spike, but equity-based volumes follow a fixed cost structure regardless of market conditions. Another advantage is that the project secures a stable shipping route outside the Middle East. Australia emerged as Korea's largest supplier from January to July this year, accounting for 28.4% of LNG imports, and cargoes from Australia do not have to pass through the high-risk Strait of Hormuz. An industry official said the Barossa gas field is considered a model case for supply chain diversification and resource security because it is a non-Middle Eastern asset in which a private company took part from the development stage and holds long-term volumes.
State-run Korea Gas Corporation has also secured a 5% stake in LNG Canada, bringing in 700,000 tons of LNG a year. Cargoes from Canada's west coast also sail directly across the Pacific, spreading transport risk. Helped by such efforts, diversification of import sources has gained pace. From January to July this year, Korea's LNG imports were led by Australia, followed by Malaysia at 17.8%, the United States at 14.3% and Canada at 8.4%, according to the Korea International Trade Association, while Qatar's share fell to 6.5%.
POSCO International recently signed a contract to acquire a gas field in the Marcellus basin of the U.S. Appalachian region for $550 million. On an LNG-equivalent basis, it will directly control about 1 million tons a year. The market sees a strong chance that POSCO International will bring cost-competitive U.S. gas into Korea in the future.
Hanwha Aerospace last month established Hanwha Horizon USA, a local U.S. unit tasked with LNG procurement, trading and logistics optimization. After securing a supply source through a long-term LNG purchase agreement with U.S.-based Venture Global, the company plans to supply fuel directly to Hanwha Energy's Yeosu LNG power plant, which begins commercial operation in 2029.
An energy industry official said that in a phase where geopolitical conflict and supply chain bottlenecks have become permanent features, simple import contracts alone cannot get companies through a crisis, adding that a preemptive approach that secures both resources and shipping routes, along with value chain expansion, is emerging as the alternative.
