KOGAS’ Overseas Resources Development Finally Begins to Pay Off

Korea Gas Corporation (KOGAS) is making progress in overseas resource development projects one after another. The state-run gas company is promoting 23 projects in 12 countries around the world, and many of them are generating profits after entering their production stages.

KOGAS announced on April 19 that it had succeeded in securing liquefied natural gas (LNG) gas equivalent to three years of domestic demand through equity participation in the Area 4 block in Mozambique. In October last year, its commercial production of LNG also started. The corporation plans not only to produce 3.37 million tons of LNG per year from the mine but also to continue additional development based on enormous natural resources by 2047.

In particular, the Mozambique Project is more meaningful in that it is the first project in which KOGAS has participated throughout its entire process from the exploration of gas fields to the development of offshore liquefaction plants to LNG production. The project has generated US$3.6 billion in total economic effects.

KNOC succeeded in securing a total of 220 million tons of resources through overseas resource development projects such as the Mozambique Area 4 Project (130 million tons) and Australian GLNG Gas Field Project (21 million tons). This is an amount equivalent to 6 years of construction introduction.

KOGAS expects that its return on investment will dramatically increase as many of its overseas projects go through energy production processes after going through tough periods. Projects in Qatar and Oman, in which the company invested in the late 1990s, have already realized returns on investment of over 8,000 percent and 15,000 percent, respectively. Projects in Australia and Indonesia invested in by KOGAS 10 years ago have also entered production stabilization phases.

The Coral LNG, LNG Canada, and Mozambique Area 4 Projects, currently in their development stages, are expected to generate profits from the time of full-scale production and recoup all investment funds by by KOGAS within the next 10 years.