POSCO-Hyundai Heavy Industries, 500 Billion KRW-Scale Myanmar Gas Field Phase 3 Development

[Asia Economy Reporter Ki-min Lee] POSCO International is partnering with Hyundai Heavy Industries to develop the third phase of the Myanmar gas field project, valued at 500 billion KRW.

On the 27th, POSCO International announced that it signed an Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) contract with Hyundai Heavy Industries for the third phase development of the Myanmar gas field. The signing ceremony was attended by POSCO Chairman Choi Jeong-woo and Hyundai Heavy Industries Holdings Chairman Kwon Oh-gap, among others.

POSCO Chairman Choi Jeong-woo stated, "It is highly meaningful to be able to carry out the third phase development of the Myanmar gas field together with Hyundai Heavy Industries Group, which possesses excellent technological capabilities. We will strive to successfully complete the development so that the Myanmar gas field, a core part of POSCO Group's liquefied natural gas (LNG) business, can maintain stable gas production."

Hyundai Heavy Industries Holdings Chairman Kwon Oh-gap also said, "We are pleased to collaborate with POSCO, a long-standing partner of Hyundai Heavy Industries Group, on an eco-friendly energy source project. As business opportunities in the eco-friendly sector are gradually expanding, we will solidify our market position through diverse technological development and bold investments."

The third phase EPCIC of the Myanmar gas field involves installing a gas compression platform and additional facilities to maintain stable production at the gas field. The gas compression platform is equipment that enables additional gas recovery from reservoirs where pressure has decreased due to cumulative production at the Myanmar gas field. Hyundai Heavy Industries plans to install the gas compression platform and connecting bridges near the existing platform area by 2024.

Regarded as a representative success case of overseas resource development by domestic companies, the Myanmar gas field began commercial production in 2013 through its first phase development, supplying approximately 500 million cubic feet of gas daily to China and Myanmar. It serves as a cash cow for POSCO Group's gas business, generating operating profits of around 300 to 400 billion KRW annually.

Hyundai Heavy Industries Group, which installed offshore platforms during the first phase development of the Myanmar gas field, was selected for the third phase development due to its recognized global technological expertise and successful experience in installing various offshore structures for oil and gas field development.

Currently, the Myanmar gas field is undergoing the second phase project aimed at developing additional production wells by 2022. An appraisal drilling of the Maha structure, located about 30 km south of the Myanmar gas field, is forthcoming, raising expectations for further expansion through integrated development with existing gas field production facilities.

Following POSCO's successful operation on the 21st of the world's first eco-friendly LNG-powered raw material carrier using 9% nickel steel, and POSCO Energy's expansion of six tanks with a total capacity of 200,000㎘ at the Gwangyang LNG terminal, POSCO Group, which is focusing on strengthening the LNG value chain, anticipates that the third phase development of the Myanmar gas field will maximize synergy across its LNG business.