Affiliate of S.Korea's POSCO Int'l to supply natural gas in Australia

South Korea's POSCO International Corp. on Thursday said Senex Energy, its Australia-based natural gas subsidiary, will supply natural gas to seven companies Down Under.

The subsidiary recently signed seven contracts for natural gas supply on a scale of around 133 petajoules with companies like Australia's largest power producer AGL, steelmaker BlueScope, Liberty Steel Group and bottle manufacturer Orora. A petajoule is the standard unit of energy, with one joule equal to one watt of power used for a second and one petajoule equal to 278 gigawatt hours.

The amount of 133 petajoules of natural gas can produce 2.5 million tons of liquefied natural gas (LNG), equal to about 25% of annual gas demand in eastern Australia. The supply period is up to 10 years from 2025.

POSCO International expressed confidence that Senex Energy through this deal secured a long-term profit structure for selling natural gas for 10 years and laid the basis for expanding energy conversion of eco-friendly resources like green hydrogen.

In addition, POSCO International invested AU$300 million (US$196.1 million or 258 billion won) in Senex Energy with Australian partner Hancock Prospecting Pty Ltd. to expand large-scale gas processing facilities amid growing demand for natural gas.

Expansion of gas processing facilities in Australia's Atlas and Romanos gas fields started in September last year. Completion of this work will boost Senex Energy's output capacity 300% by late 2025 to 60 petajoules.

POSCO International will convert part of the natural gas produced into LNG and gradually bring up to 400,000 tons to South Korea.

In April last year, the company secured management rights by buying a 50.1% stake in Senex Energy, which runs two land-based gas fields in eastern Australia.

Founded in 1984, the affiliate is one of Australia's leading natural gas producers.

"Our company is continuously expanding its energy territory through activities like signing a contract for distribution of products from Indonesia's Bunga gas block," a POSCO International source said. "We will diversify our portfolio of energy resource development through balanced business development of offshore and onshore gas fields."

Write to Hyung-Kyu Kim at khk@hankyung.com