Posco International (047050) 2024 Energy Business Value Day Presentation summary

Upstream E&P business overview

• Focuses on exploration, development, and production of crude oil and natural gas, covering the full E&P lifecycle from exploration rights acquisition to production operations.

• Organization includes 3 divisions, 12 groups, and 6 overseas subsidiaries, with 435 staff plus 270 at Senex Energy, managing projects in Korea, Myanmar, Australia, Malaysia, and Indonesia.

• Utilizes advanced geophysical and geological techniques for exploration, with a structured approach to resource evaluation and drilling success rates.

• Major assets include Myanmar’s Shwe project (multi-phase development, stable production, and contract extensions) and Australia’s Senex Energy (targeting tripling gas output by 2026).

• Strategic focus on expanding reserves, securing CCS storage, and entering new markets such as North America, with midterm goals for increased production and sustainable growth.

Midstream LNG terminal business

• Global LNG demand is projected to reach 1.7 billion tons/year by 2030, driving terminal capacity expansion, especially in Asia-Pacific.

• Gwangyang LNG terminal is a flagship private terminal with 8 tanks (1.33Mkl), two berths, and a dedicated bunkering berth, offering economies of scale and stable profits.

• Ongoing expansion includes construction of additional tanks and port facilities, with plans to convert infrastructure for hydrogen/ammonia storage as demand evolves.

• Terminal business leverages captive demand from group companies, supports direct LNG imports, and is expanding into ship commissioning, bunkering, and related services.

• Mid to long-term plans include further terminal construction, increased self-generation capacity, and expansion into Asia’s gas-to-power projects.

LNG trading and related business expansion

• LNG trading market is growing, with a shift from rigid long-term contracts to more flexible short-term trading and portfolio diversification.

• Gwangyang terminal’s geographic advantage supports the development of a Northeast Asia LNG hub, enabling import/export, resale, and inventory optimization.

• Holds a 60% market share in domestic LNG ship trial operations, with demand expected to rise due to a global shipbuilding supercycle and increased LNG vessel orders.

• Plans to enter the LNG bunkering business with dedicated vessels, targeting Southeast Korean ports, and scaling up as demand for low-carbon marine fuels grows.

• Strengthening mid- and downstream business aims to become a global trader, expanding third-party transactions, and leveraging flexible volumes and dedicated vessels for arbitrage and profitability.