Posco is merging its LNG companies

Posco's two liquefied natural gas (LNG) companies — Posco International and Posco Energy — announced a merger Friday.

Posco Energy's liquefied natural gas terminal in Gwangyang, South Jeolla. [POSCO INTERNATIONAL]

Posco’s two liquefied natural gas (LNG) companies — Posco International and Posco Energy — announced a merger Friday.

Posco International, a trading and energy company, will merge with Posco Energy, an LNG plant operator, by Jan. 1 and after a shareholders’ meeting in November. The decision was made at Posco International’s board meeting Friday, according to the company.

Each share in Posco Energy will be swapped for 1.1626920 shares in Posco International, which will be the surviving entity. The largest shareholder of the resulting company will be Posco Holdings with a 70.7 percent share.

Posco Holding currently owns 62.91 percent of Posco International and 89.0 percent of Posco Energy.

Posco Holdings has been eyeing the LNG business as a future growth engine. Posco International operates an energy business with a focus on LNG trading and development, and runs gas fields in Myanmar. The company expanded its gas development business into Indonesia and Malaysia and also acquired Australia’s Senex in March, an energy company.

The company has been supplying LNG to Posco Energy, which runs LNG terminals and plants.

When the merger is complete, the resulting company will have a full LNG product chain from development to storage and power generation.

Posco International said that it aims to ramp up natural gas reserves by 2.8 times by 2030 compared to 2021. The company hopes LNG trading volume will grow 9.1 times in the same period, power generation capacity 1.7 times, and renewable energy production 24 times.

“The merger will serve as the beginning step in creating synergy for Posco companies’ businesses after Posco Holdings became a holdings company,” said a spokesperson for Posco Holdings.

Posco Holdings, established early this year, owns Posco, the formerly-listed steelmaker. Posco subsidiaries like Posco International and Posco E&C became subsidiaries of the holding company.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]