POSCO International to take part in CCS project in Texas

POSCO International Corp., the general trading and energy exploration unit of South Korea’s steel giant POSCO Holdings Inc., is expected to win a carbon capture and storage (CCS) project in the US, a move that would accelerate its green push.

A global consortium joined by POSCO International has been named as a preferred bidder for a contract for over 140,000 gross acres of pore space owned by the Permanent School Fund (PSF) for carbon dioxide (CO₂) storage located offshore Corpus Christi, Texas, the Texas General Land Office announced on Tuesday.

The business partnership led by Spanish energy giant Repsol S.A. is participated in by not only POSCO International but also Carbonvert Inc., a US carbon capture and storage development and finance firm, and Mitsui E&P USA (MEPUSA), a US operation of Japanese Mitsui & Co. exploring and producing oil and gas.  

The Korean company holds a 10% stake in the consortium, while Repsol and Carbonvert each own 40%. MEPUSA controls 10%.

Once the consortium gets the final nod from the Texas School Land Board, the partners will build a carbon storage hub composed of offshore drilling and platform facilities, as well as submarine pipelines, with a combined storage capacity of more than 600 million metric tons of CO₂.

That is tantamount to Korea’s total carbon emissions per year, said POSCO International.

POSCO’S GREEN VISION

With the CCS project in the US, the Korean trading company’s push to transform into an eco-friendly company by 2030 is expected to gain traction.

The coastal region of Texas is perfect for a CCS project as it is a center for multiple oil and gas drilling and exploration projects, main carbon emission sources, POSCO International said.

With offshore oil and gas pipelines already installed in the region, it would be easy to capture and store CO₂, it added.

The US is also the only country where companies can make profits from reducing carbon emissions.

In addition, the US government grants a company lowering greenhouse gas emissions a subsidy of up to $85 per ton under the Inflation Reduction Act (IRA).

“With this project as a catalyst, POSCO International will accelerate the expansion of its eco-friendly portfolio and continue to discover businesses that are in compliance with our corporate citizenship initiative for both the global and local communities,” Jho Jhoon-soo, head of E&P Business Division for POSCO International, said after its alliance won the CCS project in Texas.

POSCO International plans to build its American CCS operation, called POSCO International CCS USA LLC, this month to seek additional CCS projects in the country.

In April, POSCO International announced its green vision and completed a merger with its unlisted affiliate POSCO Energy Co. to reinforce its energy exploration and production value chain earlier this year.

Write to Jae-Fu Kim at hu@hankyung.com

Sookyung Seo edited this article.