POSCO INTERNATIONAL : to Acquire an Australian Natural Gas Company to Lay the Basis for Blue/Green Hydrogen Business in Preparation for Energy Transition

- Jointly acquiring Senex Energy with Hancock, a partner in the Roy Hill iron ore mining project
- Securing 44% of Korea's annual natural gas consumption to contribute to national prosperity through resources procurement

POSCO INTERNATIONAL is pursuing global M&A deals in preparation for the upcoming era of energy transition. Following the expansion of its energy business previously focused on Myanmar into Malaysia and Indonesia, the Company is set to reach a new milestone in overseas natural gas development through the acquisition of an Australian natural gas company.

POSCO INTERNATIONAL (President Joo Si-Bo) announced on December 12 that the Company entered into a Scheme Implementation Agreement (SIA) with Senex Energy Limited of Australia to take over its shares as well as a Joint Investment Deed agreement with Hancock Energy Corporation to acquire the Australian natural gas company. When the deal is completed next March, which is subject to approval granted at the general shareholder meeting of Senex Energy and a local court, this will enable POSCO INTERNATIONAL to join the league of global E&P (Exploration & Production) players in its truest meaning.

The acquisition represents the largest-ever global M&A deal signed by the Company since its incorporation into POSCO Group in 2010. The total value amounts to KRW 77.09 million (AUD 885 million), and 50.1% of this will be funded by POSCO INTERNATIONAL with the remaining 49.9% funded by Hancock.

Senex Energy, as Australia's 6th largest natural gas producer and developer, owns three gas fields (Atlas, Roma North and Louisiana) and two exploration blocks (Artemis and Rockybar). Its annual natural gas production capacity amounts to 19Bcf, which is reliably supplied through pipelines to the eastern region of Australia and the nation's LNG liquefaction plant market.

Some of the reasons that made this deal possible on the part of POSCO INTERNATIONAL include the low investment risks inherent in Australia as a mature mining market. Furthermore, the eastern region of Australia that is home to a large number of industrial complexes provides a diversified consumer base, and the onshore gas pipelines already established will help the Company reduce investment costs while improving business feasibility. First and foremost, the decision was driven by POSCO INTERNATIONAL's confidence to proactively leverage its E&P capabilities accumulated for more than two decades since the Company initiated its exploration business in Myanmar.

The acquisition of Senex Energy will allow POSCO INTERNATIONAL to secure approximately 802Bcf in natural gas reserve, which equals 44% of Korea's annual natural gas consumption in 2019, as well as workforce with extensive experience in onshore gas field operations in Australia. Building on the stable operation of LNG business, the Company is expected to harness Senex Energy's gas fields to engage in CCS (Carbon Capture & Storage) business and blue/green hydrogen production to eventually contribute to POSCO Group's carbon neutrality strategy.

Specifically, jointly endeavors made to acquire Senex with Hancock that has formed amicable partnerships with POSCO through the Roy Hill project will surely mitigate investment risks and boost synergy between the two companies in promoting energy transition business in the years ahead.

"Natural gas has a highly prominent role to play in bracing for the upcoming hydrogen economy", President Joo Si-Bo stated and went on to say "This deal will serve not only as a critical turning point in broadening our territory into energy transition business, but also as an opportunity to further solidify our position as a global natural gas developer".

Since its announcement to pursue qualitative evolution from a general trading company into a Globally Integrated Corporation, POSCO INTERNATIONAL has worked to lead the paradigm shift in steel, energy and agro businesses for the past two years. The acquisition of Senex Energy will signify the first step taken by the Company to emerge as a global player in addition to expanding its natural gas business.