Global Market Power
With the success of Mexico’s Manzanillo liquefied natural gas (LNG) terminal construction project, Korea Gas Corporation (KOGAS) is expanding its dominance in the global LNG market.
According to KOGAS on Oct. 22, the Manzanillo LNG terminal project is part of the national infrastructure investment project worth US$3 billion (3.41 trillion won) carried out by the Mexican government to create a 318 km main gas pipeline in the private power plant in Guadalajara, to construct the Manzanillo cogeneration power plant units 1 and 2, and to create a port.
Mexico’s Federal Electricity Commission (CFE) placed an order in 2008 in a bid to convert coal-fired power that is generated the western region of Mexico into natural gas and to increase the generating capacity. The project was won by a consortium of KOGAS (25 percent), Samsung C&T (37.5 percent) and Japan’s Mitsui (37.5 percent).
Despite a relatively short period of LNG operations compared to advanced countries, KOGAS has the best technology to construct and operate an LNG handling base in the world. KOGAS’s Pyeongtaek station has the largest storage capacity in the world, while its Incheon station enjoys the dominant position in delivery capacity.
The Manzanillo project was the first overseas LNG handling base investment and technology export case achieved by KOGAS in cooperation with private companies, which were unable to make inroads into the global LNG market on their own.
The Mexican authorities were also so interested in the project that the President personally participated in the EPC construction completion ceremony in Sept. 2011 and the opening ceremony in March 2012.
An official from KOGAS said, “Considering the fact that it is the first project that Korean companies directly own and operate the overseas LNG gas plant with a 62.5 percent share in total, it is the commendable cooperation model on a national level.”
The fact that KOGAS enters the middle and downstream sectors in the overseas gas industry is to export its 30 years of expertise in LNG base plant construction and operation to the global market.
KOGAS has already collected 55.38 percent of the principal from the Manzanillo project in the last five years. It expects to create 129 billion won (US$113.36 million) of profits by 2031.