Considering 'Public Interest' When Supplying City Gas... "Increasing Energy Benefits for Local Residents"

Gas Gong Natural Gas Supply Regulation Amendment Approved by Ministry of Industry
Comprehensive Evaluation of Public Interest and Profitability When Reviewing Supply Point Establishment

[Asia Economy Reporter Kim Bo-kyung] Korea Gas Corporation announced on the 28th that the amendment to the natural gas supply regulations has received final approval from the Ministry of Trade, Industry and Energy. This amendment is a measure to enhance public interest when establishing new supply points (gas supply management stations) in areas where city gas is not supplied.

Considering recent economic and social changes, the Gas Corporation included in the amendment the implementation of a 'Comprehensive Evaluation of Public Interest and Profitability,' which applies the government's preliminary feasibility evaluation method when reviewing newly established supply points to reflect public interest aspects such as regional balance.

While evaluations were previously focused mainly on profitability, going forward, public interest and profitability will be comprehensively assessed.

In accordance with the 13th Long-term Natural Gas Supply Plan in 2018, the Gas Corporation continuously consulted with the Ministry of Trade, Industry and Energy and finalized the 'Domestic Natural Gas Supply Facility Investment Project Feasibility Evaluation Criteria' last July. After explaining the system and collecting opinions from stakeholders such as the city gas industry, LPG operators, and local governments, the amendment was approved at the board meeting on the 18th of last month.

In the future, based on applications for establishing supply points from city gas companies in each region, the Gas Corporation plans to objectively evaluate the project promotion process by fully quantifying items such as ▲economic feasibility, ▲local government project promotion willingness, ▲city gas company retail pipeline investment plans, ▲city gas supply rate, and ▲regional underdevelopment.

In particular, the local government project promotion willingness and city gas company retail pipeline investment plan items will serve as decisive factors for establishing supply points depending on the active efforts of local governments and city gas companies.

The Gas Corporation evaluates the project promotion willingness based on the amount of support from the relevant local government for the demand charge calculated according to local government supply regulations and notices. The city gas supply rate and regional underdevelopment will be objectively evaluated based on the status of the local government regardless of the efforts of the local government or city gas companies.

A Gas Corporation official said, "With the new establishment of supply points according to this amendment, the conditions for city gas supply in the region are expected to improve, thereby increasing the energy benefits for residents in the area. We will continue to strive for safe and stable natural gas supply."

Meanwhile, the Gas Corporation currently supplies natural gas to 211 out of 229 local governments nationwide (92%). Excluding 13 areas where county-level LPG pipeline projects are being promoted, it plans to complete the natural gas supply system for 216 areas (94%) by next year.