POSCO International, Petronas to develop Malaysian offshore gas field

POSCO International Co., the trading unit of South Korean steelmaker POSCO Co., is set to develop an offshore gas field in Malaysia with the country’s state-run energy company Petroliam Nasional Berhad (Petronas), expanding its discovery of overseas energy resources.

POSCO International said it has won the license in an international bid to explore and operate the PM524 block where Petronas is already operating a gas field. The 4,738 square kilometres block lies east of the Malaysian peninsula in waters 50-80 metres deep.

"It is an opportunity to expand the energy business map concentrated in Myanmar," a POSCO International official said. Daewoo International, the former entity of POSCO International, secured the exploration rights in A-1 and A-3 gas fields off Myanmar in 2000.

“We secured a potentially natural gas rich field, an important turning point that will serve as a new growth engine and groundwork for energy business expansion, when natural gas demand is increasing.”

POSCO International is scheduled to sign a deal on product distribution with Petronas after discussing details. After the contract, it will explore the block in the next four years. POSCO International will hold an 80% stake with the operation right, while Petronas’ subsidiary Petronas Carigali Sdn Bhd.

Petronas is operating the Tanga Barat gas field in the PM524 block. POSCO International considers another development linked to the field once it succeeds in exploring gas in the PM524 block.

“If realized, we will be able to reduce the gas field’s initial development costs and time,” said another POSCO international official.

In addition, POSCO International plans to develop eco-friendly energy technologies with Petronas in a move to achieve POSCO Group’s ‘2050 carbon neutrality’ target. Malaysia is stepping up efforts led by Petronas for a similar goal by developing such technologies including clean gas development through Carbon Capture and Storage (CCS), as well as green ammonia and hydrogen production.

POSCO International last month announced an agreement with Indonesia’s PT Pertamina Hulu Energi (PHE) to look for joint oil and gas exploration opportunities off the Southeast Asian country. The company is also seeking expansions of natural gas business in its strategic markets - Southeast Asia and Australia.

Write to Jung-hwan Hwang at jung@hankyung.com
Jongwoo Cheon edited this article.