The Korean government will more than triple its imports of Canadian crude oil this year as nations move to strengthen energy and resource security amid the Middle East conflict. The two countries also plan to expand cooperation in critical minerals, including drafting a joint stockpile plan by the end of this year.
The Ministry of Trade, Industry and Energy (MOTIE) said it co-hosted the "Korea-Canada Energy Resource Supply Chain Cooperation Forum" with Natural Resources Canada in Ottawa on Tuesday, local time. The forum was arranged in connection with Presidential Chief of Staff Kang Hoon-sik's visit to Canada as a special envoy for strategic economic cooperation. The two sides agreed to expand mutually beneficial cooperation across all resource sectors, including crude oil, liquefied natural gas (LNG), and critical minerals.
Specifically, Korea will expand its Canadian crude oil imports to 16 million barrels this year, 3.3 times more than last year's 4.88 million barrels. Korea also plans to explore ways to further increase Canadian volumes to a maximum of 20 million barrels per year. This will allow Korea to diversify its crude oil import sources, which are currently heavily dependent on the Middle East. "For Canada, which has supplied more than 90% of its crude production to the United States, this is also mutually beneficial as it can diversify its export destinations," a MOTIE official said.
In the LNG sector, the two sides discussed plans to advance Phase 2 of the LNG Canada project, in which Korea Gas Corp. participates with a 5% stake and currently imports 700,000 tons annually. The Phase 2 project targets a final investment decision within the third quarter of this year. If a new project with an annual capacity of 2 million tons proceeds in addition to Phase 2, Korea is expected to secure a stable supply of 3.4 million tons of Canadian LNG annually. In that case, Korea's share of LNG imports from Canada would expand from 1.7% last year to 3% by 2031. "LNG shipped from western Canada, which is free of geopolitical risk, arrives in Korea in just 13 days, contributing to supply stability," a MOTIE official said.
The two governments also agreed to strengthen cooperation in the critical minerals sector. Following the leaders' phone call on the 8th of last month, in which they agreed on cooperation for joint stockpiling of critical minerals, MOTIE and Natural Resources Canada plan to draw up a related joint plan by the end of this year. In addition, the Korea Institute of Geoscience and Mineral Resources (KIGAM) and the Geological Survey of Canada (GSC) signed a memorandum of understanding (MOU) on the sidelines of the forum, agreeing to cooperate on preemptively securing supply chains for natural hydrogen, which has lower production costs.
