POSCO International Accelerates Gas Production Expansion in Australia

Gas Production to Triple by 2025

[Asia Economy Reporter Kiho Sung] POSCO International is taking active steps to expand its energy business, including tripling natural gas production in Australia by 2025 compared to current levels.

On the 25th, POSCO International announced that it will provide AUD 300 million (approximately KRW 280 billion) in funding to its subsidiary Senex Energy, together with its Australian energy business partner Hancock Energy.

The main reason behind POSCO International's investment is to contribute to stabilizing domestic energy supply amid rising natural gas prices.

Due to global supply shortages, competition among countries to secure energy resources, the transition from coal to gas power generation, and seasonal factors, natural gas prices are expected to remain high for an extended period, making this the right time for additional gas field development.

In particular, the gas market in eastern Australia, where Senex Energy mainly operates, is expected to see increased gas sales due to medium- to long-term supply shortages. The global financial firm UBS has forecasted that eastern Australian gas prices could rise from the current AUD 10 to AUD 18 by 2030.

Through this investment, POSCO International plans to expand Senex Energy's annual gas production capacity from 20 PJ (petajoules, an international energy measurement unit) to 60 PJ by the fourth quarter of 2025, tripling the current output. The 60 PJ of natural gas corresponds to approximately 1.2 million tons of liquefied natural gas (LNG). To achieve this, Senex Energy will expand gas processing facilities and increase production drilling at the Atlas and Romanos gas fields currently in production by 2024, aiming to meet the increased gas production target by 2025.

After establishing the gas production expansion system, POSCO International plans to promptly proceed with follow-up development of existing gas fields, as well as appraisal drilling of the Artemis and Rockybar blocks it holds, while actively pursuing the acquisition of additional gas fields that are easy to develop in conjunction.

Additionally, plans are underway to import some of the increased natural gas as LNG into Korea. Starting with an annual maximum import of 400,000 tons domestically after 2025, the import volume will be gradually expanded. This is expected to contribute to national energy security to some extent.

Alongside natural gas production expansion, POSCO International will also actively promote eco-friendly energy projects such as green hydrogen production using Senex Energy.

In collaboration with CS Energy, a power company owned by the Queensland State Government in Australia, a solar power demonstration plant for green hydrogen production is scheduled to begin construction in the fourth quarter of this year, with green hydrogen production expected to start from the fourth quarter of 2023 after the demonstration phase is completed.

A POSCO International official stated, "We plan to achieve both profitability improvement and resolution of domestic energy supply instability through natural gas production expansion," adding, "The expansion of energy business through Senex Energy and the absorption merger of POSCO Energy will be a turning point for POSCO International to leap forward as a global energy company."

Meanwhile, Senex Energy, established in 1984, has grown into one of Australia's major natural gas producers. Since becoming a subsidiary of POSCO International in April, it has maintained solid performance with sales of KRW 100 billion and operating profit of KRW 20 billion over five months until August, contributing to the parent company's profit growth.

This content was produced with the assistance of AI translation services.