SEOUL, April 8 (Yonhap) -- Import prices of liquefied natural gas (LNG) were slashed by one-third in six months on global oversupply and a drop in demand, industry data showed Monday.

The Korea Energy Economics Institute (KEEI) and industry figures said the benchmark Japan Korea Marker (JKM) index showed the metric million British thermal unit (MMBtu) standing at just US$4.429 early this month.

The JKM is used as a measure of the spot price of LNG shipped to the two Northeast Asian countries, with MMBtu being the international standard for LNG prices.

This marks a significant drop from an MMBtu of $12 in September last year.

Industry watchers said that increased exports of U.S. shale gas and a rise in production by Australia and Egypt seem to have brought down prices, while milder the winter weather in South Korea caused a drop in demand.

Asia's fourth largest economy is one of the top three importers of LNG, along with Japan and China. In 2017, South Korea bought 38.65 million tons of LNG, compared to 84.48 million tons for Japan and 39.49 million tons for China.

U.S. exports of LNG reached 2.21 million tons in December 2018, a twofold rise from a year earlier, with outbound shipment numbers standing at over 2 million tons in the first two months of this year.

Related to the drop in prices, Seoul's decision to lower import tariffs on the energy resource is expected to cut the overall cost of power generated by LNG, resulting in a falloff of electricity going forward.

The lower tariffs are intended to allow a greater use of LNG, which creates less fine dust than other fossil fuels.

yonngong@yna.co.kr
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