Merger with POSCO Energy approved, announced a large-scale investment at the EGM on the 4th of this month

- The plan focuses on expanding and advancing each of the LNG value chain from exploration, production, and storage to generation

- Continuous eco-friendly energy investments expected in wind power, solar power, and hydrogen co-firing sectors

POSCO INTERNATIONAL (CEO: Joo Si-Bo) will be making bold investments as part of its initiative to become a global eco-friendly energy company.

On the 4th of this month, POSCO INTERNATIONAL held an extraordinary general meeting (EGM) of shareholders at its Songdo headquarters, during which its merger with POSCO Energy was finally approved. This approval is the groundwork for the official merger of the two companies, which is scheduled on January 1st of the next year.

The merger will see POSCO INTERNATIONAL reborn as a recognized energy giant with annual sales of 40 trillion KRW and operating profit of more than 1 trillion KRW.

At the shareholders' meeting, CEO Joo Si-Bo also announced a large-scale investment plan along with growth strategies for the energy business. The plan includes an investment of 3.8 trillion KRW over the next three years starting from 2023 in line with the growth strategies of each sector, namely E&P, LNG infrastructure, power generation, and eco-friendly energy.

A total of 1.3 trillion KRW will go into the exploration and production sector with the goal of accelerating resource development. The company also plans to triple natural gas production in Australia by 2025 through its subsidiary, Senex Energy, on top of expanding its production base by securing marine exploration rights in Indonesia the next year.

As for the storage sector, a total of 1.6 trillion KRW will be invested in expanding the LNG infrastructure. The capacity of the existing 730,000-kl storage tanks in Gwangyang and Dangjin terminals will be increased over the course of three years. By increasing their capacity, the firm expects to secure 4.65 million tons of LNG transaction volume and storage infrastructure capable of handling 1.81 million kl in Korea by 2026.

A 700 billion KRW investment will be made in the power generation sector as part of the company's eco-friendly transformation, which includes the development of hydrogen co-firing powerplants. Units 3 and 4 of the seven LNG power plants in Incheon will be converted into hydrogen co-firing units, which is anticipated to give rise to the world's first gigawatt-level commercial hydrogen co-firing powerplant.

Through the series of aggressive investments, POSCO INTERNATIONAL hopes to complete all LNG value chains that extends from exploration, production, storage, and all the way to power generation. These profit businesses will further fuel its eco-friendly energy projects, such as renewable energy and hydrogen.

In particular, a 200 billion KRW investment will go into developing renewable energy for the next three years. This is anticipated to increase renewable energy generation, such as onshore/offshore wind power and solar power, by sevenfold by 2025 from the current 0.1 GW level. The plan includes expanding the currently unavailable ammonia (hydrogen) storage tanks to secure a storage capacity of 100,000 kl by 2025 and 510,000 kl by 2030.

The investment will be sourced from the company's annual EBITDA of 1.5 trillion KRW. This growth-oriented investment is predicted to increase the company's shareholder value by raising the company value from the current 4.4 trillion KRW to 13 trillion KRW by 2030.

"The merger of the two companies signifies a step towards bringing together and completing the dispersed LNG value chains to secure a competitive edge on a global scale," a POSCO INTERNATIONAL official said. "Not only will the merger fuel the growth of POSCO Group, but it will also drive our transformation into a globally recognized eco-friendly energy specialist that contributes to Korea's energy security."