Posco subsidiary touts natural gas discovery

Posco International has found a new offshore gas reservoir in Myanmar, the company announced Monday.

While carrying out exploratory undersea drilling for its Mahar gas project, the company discovered a reservoir with an estimated yield of 38 million cubic feet of natural gas per day, Posco International said in a statement.

The company said it found the new reservoir after drilling 2,598 meters (8,524 feet) into the seabed at the Block A-3 on the Myanmar Gas Field.

The trading affiliate of South Korean steel giant Posco plans to start test drilling in 2021, and will spend two years conducting its analysis for future drilling and extraction plans. The value of the reservoir is difficult to determine, a company official said, with unknowns including the purity of the gas and the ease with which it can be extracted.

The new reservoir is just 30 kilometers (19 miles) away from gas fields associated with the Shwe project, for which Posco International is the operator. The proximity could help the corporation save money on facility investments and construction for the drilling project.

The company is hoping to find another gas reservoir soon, as it is tasked with another drilling project at a seabed just 24 kilometers away from the reservoir site discovered Monday.

Posco International’s profit levels have surged recently from gas production projects in the Asian country.

The company is already producing and selling gas from two offshore gas fields in Myanmar. It hopes to start commercial production at two more fields in the country in 2021 and 2022.

The company signed a front-end engineering design contract with McDermott for the Shwe Phase 3 gas field development in November.

The profitable gas projects helped Posco International raise its highest-ever operating profit of 605.3 billion won ($511 million) last year, up 28.1 percent on-year. Its net income for 2019 rose 74.9 percent from a year earlier to 202.4 billion won, although its sales revenue declined 3 percent to 24.42 trillion won.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]