POSCO INTERNATIONAL Takes a Full-fledged Step

in Natural Gas Production in Australia Planning

to Triple Gas Production by 2025

- Co-invests in Senex Energy together with its partner company for increased production

- Annual production volume is expected to triple compared to the current volume by 2025

- Some of the natural gas will be imported into Korea as a means to contribute to the national energy security

- Eco-friendly energy conversion initiatives have been started with the expectation of green hydrogen production in 2023

POSCO INTERNATIONAL (CEO: Joo Si-Bo) will be taking a full-fledged initiative to expand its energy business, which will include tripling its natural gas production in Australia compared to the current level by 2025.

POSCO INTERNATIONAL, together with its Australian energy business partner, Hancock Energy, will be providing AUD 300 million (about KRW 280 billion) of funds to its subsidiary, Senex Energy.

This additional investment by POSCO INTERNATIONAL took place as part of the company's roadmap to contribute to stabilizing the rise in natural gas prices as well as energy supply and demand in Korea.

The prices of natural gas is expected to remain high for longer as the competition for energy resources among countries intensifies due to a global supply shortage, worsened by the gradual conversion of power generation from coal to gas as well as the impacts of seasonal factors. Accordingly, POSCO INTERNATIONAL saw that now is the right time to develop additional gas fields.

In particular, the gas market in eastern Australia, which is Senex Energy's primary business region, is expected to see an additional increase in gas prices due to a mid- to long-term supply shortage. UBS, a global financial company, has predicted that gas prices in eastern Australia could rise from the current AUD 10 to AUD 18 by 2030.

With this investment, POSCO INTERNATIONAL plans to multiply the annual gas production capacity of Senex Energy by three times from 20 PJ (Peta-Joule, the international unit of energy measurement) to 60 PJ by the fourth quarter of 2025.

60 PJ of natural gas is the amount that can produce about 1.2 million tons of liquefied natural gas (LNG). To this end, POSCO INTERNATIONAL plans to build additional gas processing facilities in the Atlas and Romanos gas fields through Senex Energy by 2024, and increase production drilling volume to achieve the goal of raising gas production by 2025.

Following the establishment of additional gas production facilities, POSCO INTERNATIONAL intends to expedite the subsequent development of the current gas fields as well as the evaluation drilling of its Artemis and Lokiba mines, while also actively acquiring additional gas fields that enable a joint development of the fields.

Furthermore, it plans to develop ways to bring a portion of the additionally produced natural gas into Korea after turning it into LNG and increase the annual volume in steps from up to 400,000 tons starting in 2025 and more from then on. This is expected to contribute to the national energy security to a certain extent.

Along with the increase in natural gas production, POSCO INTERNATIONAL also anticipates engaging in eco-friendly energy businesses, such as green hydrogen production, via Senex Energy.

The company plans to start the construction of a solar power generation demo plant for green hydrogen production in collaboration with CS Energy, a power generation company owned by the Queensland state government in Australia, in the fourth quarter of this year, with the actual production expected to begin in the fourth quarter of 2023 when the demonstration is finished.

"With the increase of natural gas production, we hope to achieve two goals of improving the profitability and resolving energy supply shortage of Korea," a POSCO INTERNATIONAL official remarked. "The expansion of our energy business through Senex Energy and our merger with POSCO ENERGY will be the turning point for POSCO INTERNATIONAL as we take a leap towards becoming a global energy giant."

Since its establishment in 1984, Senex Energy has grown into one of Australia's major natural gas producers. Even after being incorporated into POSCO INTERNATIONAL as a subsidiary this April, it has maintained solid performance reaching KRW 100 billion in sales and KRW 20 billion in operating profit over the five months until August, thereby contributing to the parent company's improved earnings.

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Posco International Corporation published this content on 25 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 October 2022 07:51:03 UTC.