CAPITAL: Seoul

MONETARY UNIT: Won

REFINING CAPACITY: 2.54 million b/d

OIL PRODUCTION: None

OIL RESERVES: None

GAS RESERVES: None

South Korea said domestic oil consumption would rise by up to 7.4% in 1999 after falling in 1998 for the first time in 16 years.

South Korea was expected to import between 700.53 million bbl and 736.1 million bbl of oil in 1999, according to the Korea Petroleum Association. The country expected to have imported 681.9 million bbl in 1998.

OIL demand was down about 14% in 1998, the first drop since 1982, as Korea slid into its worst recession in 45 years.

South Korea imported 60% of its crude oil from the Middle East and the rest from Southeast Asia and other regions.

Meanwhile, South Korea would push for a drastic energy and resources conservation plan, including oil and electricity, to cope with possible shortages. The energy-saving plan was the country`s first since the late 1970s.

The government was planning to raise the price of electricity, oil, gas, and coal gradually until 2002 to the average level of the non-oil-producing member countries of the Organization for Economic Cooperation and Development.

Prices of diesel, kerosine, and electricity would likely jump more than 100% during 5 years.

The government also was considering allowing Korea Electric Power to import gas directly for power generation, while letting gas suppliers generate and sell electricity.

Processing activity

Enron signed a joint venture accord with South Korea`s SK Corp. to distribute gas in the country. Enron said the deal, valued at $450 million, marked the first time a foreign firm had held an equity stake in South Korea`s gas sector.

Enron would gain interests in five of SK`s city gas companies-Daehan, Pusan, Cheongju, Pohang, and Kumi City Gas-and in its LPG importer, SK Gas.

Collectively, these companies held a 20% share of the country`s natural gas market and a 50% share in its LPG market.

Korea Gas Corp. was building two 140,000-kl LNG storage tanks and other equipment at its Inchon regasification terminal.

Hyundai Petrochemical Co. completed construction of its second $1 billion petrochemical complex at Daesan.

The plant, with ethylene capacity of 550,000 metric tons/year, made Hyundai South Korea`s largest ethylene manufacturer, with a production capacity of 1 million tons/year. Hyundai Petrochemical would also make 1.1 million tons/year of polymers, including low-density polyethylene, high-density polyethylene, and polypropylene.

Meanwhile, Hyundai Oil Refinery Co. had completed an aromatics plant able to produce 400,000 tons/year of benzene, toluene, and xylenes, also at Daesan.

The Federation of Korean Industries said the country`s five largest conglomerates would merge firms in seven sectors in a move aimed at pulling the country out of recession.

In the petrochemical sector, Hyundai Petrochemical Co. and Samsung Petrochemical Co. planned to merge.

And Hyundai Oil Refinery Co. would take over the debt-laden Hanhwa Energy Co. Hanwha Group had struggled to sell its refinery business after refusing to write off its debts, which were 25 times larger than its assets.

Saudi Arabian Oil Co. (Saudi Aramco) took a further 14% in its South Korean joint venture, Ssangyong Oil Refining Co., for $170 million. That gave Aramco a 49% stake in the 500,000 b/d Onsan refinery, Korea`s third largest.

Aramco supplied more than 95% of the refinery`s crude needs in 1997.