Decision to Withdraw Project Due to Decreased Benefits and Other Reasons
The Chungnam Environmental Movement Association and others expressed their welcome on the 15th at the Chungnam Provincial Government Office regarding the decision to withdraw Korea Midland Power's Boryeong LNG Terminal construction project. / Naepo = Photo by Kim Ayoung
Korea Midland Power has decided to withdraw from the Boryeong LNG terminal construction project.
According to the Chungnam Environmental Movement Association and others on the 15th, Korea Midland Power had planned to push forward the Boryeong LNG terminal construction project following the government's 9th Basic Plan for Electricity Supply and Demand, which confirmed the conversion of aging coal power plants to LNG power generation.
However, after a recent board meeting and an internal re-evaluation of the feasibility of the LNG terminal construction project, the company decided to withdraw the project due to a significant decrease in expected benefits if the project were to proceed.
The re-evaluation found that the total project cost would increase by about 22%, from 732.1 billion won to 894.6 billion won, compared to the previous KDI preliminary feasibility study.
The estimated average annual demand for LNG was also reported to decrease by 67%, from 1.153 million tons to 384,000 tons, and project profitability was expected to drop by 304.7 billion won.
Accordingly, Korea Midland Power decided to independently withdraw the project instead of requesting a preliminary feasibility re-evaluation under the Enforcement Decree of the Act on the Management of Public Institutions.
Environmental groups in the Chungnam region welcomed this decision.
The Chungnam Environmental Movement Association, Plan 1.5, and Solutions for Our Climate held a press conference at the provincial government office, stating, "Nationwide, the construction of new LNG power plants and terminals is expanding, and the conversion of aging coal power plants to LNG is being promoted as a replacement project. However, the government has specified in the draft of the 11th Basic Plan for Electricity Supply and Demand that LNG power generation should be rapidly reduced after 2030, and it is predicted that the prices of key materials will continue to rise due to unstable global inflation."
They added, "The LNG business cannot be justified in terms of climate and environmental considerations, nor in terms of mainstream market economic logic," urging, "We call on Korea Midland Power and other power generation companies to make rational decisions regarding LNG projects."
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