l POSCO to transfer Gwangyang LNG Terminal to POSCO Energy and to merge off-gas power plants in Gwangyang and Pohang
l Advancing POSCO’s LNG midstream business is part of ‘100 reform projects’ announced last year
l CEO Jeong-Woo Choi remarks, “The restructuring will enhance efficiency and institute solid structures to each group’s business.”
POSCO is set to reorganize the company’s LNG midstream operations.
On April 12, the board decided to transfer its LNG storage facilities, currently managed by Gwangyang, to POSCO Energy which has expertise in power generation. The board also decided that POSCO will merge POSCO Energy’s off-gas combined cycle power plants inside the Gwangyang and Pohang Steelworks – the off-gas power plants are fueled by residual products generated from steelmaking process.
The restructuring is part of POSCO CEO Jeong-Woo Choi’s ‘100 reform projects,’ and it aims to advance POSCO’s expertise in LNG midstream business.
Through the reshuffle of LNG midstream operations, POSCO can expect optimized synergy between POSCO International’s gas field projects and POSCO Energy’s power generation operations.
POSCO CEO Jeong-Woo Choi remarked, “The restructuring will enhance efficiency and institute solid structures to each group’s business.”
Going forward, POSCO International will fully take over the LNG trading procedures. In turn, POSCO Energy’s takeover of LNG terminal operation can create synergy with the power generation – the company’s current specialty. The expected outcome of the whole process is boosted competitiveness of POSCO’s LNG midstream operation.
By taking over Gwangyang and Pohang Steelworks’ off-gas combined cycle power plants, POSCO will be able to integrate its operation system with existing independent power generation facilities to maximize efficiency and raise the stability of electric power supply to steel mills.
The LNG terminal in Gwangyang, which POSCO Energy will be taking over, is Korea’s first privately invested LNG terminal. Altogether there are five LNG tanks – four currently in operation and one more in construction, the total storage capacity of which at 730,000 ㎘.
Midstream describes one of the three major stages of oil and gas industry operations which include the processing, storing and transporting of natural gas and natural gas liquids. The other major stages are upstream, which refers to raw crude oil and natural gas production, and downstream, which refers to the point of sale. The LNG terminal is part of the midstream stage.