POSCO to treble natural gas production in Australia by 2025

South Korea’s POSCO International Co. plans to more than treble the natural gas production from the two gas fields of its newly-acquired Australian arm, Senex Energy Co., by 2025, the trading company’s Chief Executive Joo Si-bo said earlier this week.

Senex produces natural gas of about 20 billion cubic foot per year, according to industry insiders. Cubic foot is a standard unit to measure the amount of natural gas.

Based on Senex's sales of A$116 million in 2021, trebling its natural gas production is expected to generate about 260 billion won ($202 million) in additional revenue for POSCO International.

“Senex Energy is POSCO’s bridgehead to secure future energy,” Joo said during his inspection of Senex’s natural gas field in Australia between June 14 and 15.

Senex engages in natural gas and oil exploration, oil refining and oil pipeline transportation.

His trip to the Australian gas field comes after POSCO acquired a 50.1% stake in Senex Energy for A$442.2 million last April. Hancock Prospecting Pty Ltd, POSCO's Australian mining partner, bought the remaining 49.9%.

Both companies paid a combined A$815 million for what was POSCO International’s largest-ever acquisition since it was purchased by steelmaker POSCO Co. in 2010.

POSCO International has been benefiting from the rising prices of global liquefied natural gas (LNG) since it started full-scale production of natural gas in 2013 in the Shwe gas field in the Bay of Bengal, off the coast of Myanmar.  

The subsidiary of POSCO Co. also has embarked on oil and natural gas exploration off the coast of Malaysia and secured exploration rights off Indonesia for large-scale oil and gas development. 

POSCO International posted a record-high operating profit of 216 billion won in the first quarter, up 70.2% from the year previous.

SOLAR ENERGY, GREEN HYDROGEN

Separately, POSCO International and CS Energy, owned by the government of Queensland, are preparing demonstration projects to generate electricity from solar panels and to operate a facility for producing green hydrogen, or hydrogen generated by renewable energy.

If the temporary projects prove successful, both companies will try to export green hydrogen to Australia and other countries.

Hydrogen and energy businesses are among the steel giant group’s growth drivers.

POSCO Group is looking to more than treble its corporate value by 2030, for which the steel giant plans to spend a combined 53 trillion won in steel, rechargeable battery materials and hydrogen sectors by 2026, according to its announcement last month.

For Senex Energy, the POSCO International CEO Joo vowed to provide all support necessary for the Australian company to achieve its decarbonisation goal by 2040 as announced before. By comparison, POSCO is aiming to reach zero-emission by 2050.

The consolidated operating profit at Senex Energy in 2021 came in at A$25 million against A$116 million in sales.

Write to Jung-Min Nam at peux@hankyung.com
Yeonhee Kim edited this article