POSCO International Focuses on M&A Opportunities in the U.S. Natural Gas Market

POSCO International Corp., the trading and energy exploration arm of South Korea's POSCO Holdings Inc., is actively considering acquiring a local company within the dynamic U.S. natural gas sector, according to reports from KED Global. During its recent 2024 Energy Business Value Day, held on October 17-18, POSCO International announced its strategic intentions to penetrate the North American natural gas market. The company has expressed particular interest in the natural gas terminal sector, which presents lower investment requirements and reduced entry barriers compared to other segments, such as production, liquefaction, and shipping.

Historically, POSCO International made an attempt to acquire a gas terminal business in Texas, reflecting its ambitions in this area. According to the KED Global, an official from the company commented, “We are in the very early stages of talks. Even if we proceed with an M&A, it would take some time before we acquire a company.” The current landscape of the U.S. natural gas industry has captured the attention of the Korean firm, especially amid the ongoing shale gas and oil boom that has firmly established the U.S. as the world’s leading producer and exporter of natural gas. The global demand for natural gas remains robust, driven by a worldwide push to phase out more polluting fuels like coal in favor of cleaner energy alternatives.

KED Global notes, “The U.S. is one of the few countries capable of exporting natural gas,” which indicates that companies like POSCO International can anticipate substantial profits by utilizing gas produced from their investments in U.S. wells. This gas can be efficiently transported via pipelines to southern ports, where it is subsequently exported overseas, thus enhancing the economic viability of these ventures.

POSCO International is well-prepared for M&A activities, with expectations to generate an operating profit of approximately 1.2 trillion won (around $871.1 million) this fiscal year. Looking forward, the company intends to broaden its reach into other segments of the U.S. natural gas value chain, including upstream exploration and production, as well as midstream activities encompassing transportation, storage, and trading. In a significant strategic move last year, POSCO International bolstered its global LNG presence by absorbing its affiliate, POSCO Energy Co., which was responsible for operating LNG storage facilities. Until this acquisition, POSCO International had primarily focused on importing LNG.

In a demonstration of its commitment to expanding its LNG capabilities, POSCO International completed the construction of its first privately operated LNG storage and regasification facility in Gwangyang this summer, boasting a capacity of 930,000 kiloliters. Furthermore, a second LNG terminal is currently under construction in proximity to the first. Upon completion, the total storage capacity will rise to an impressive 1.33 million kiloliters. This expansion will solidify POSCO International's position as Korea’s largest private LNG terminal operator and the 11th-largest globally, significantly enhancing its influence and competitive edge in the international LNG market. Through these strategic initiatives, POSCO International is poised to play a vital role in shaping the future of the U.S. natural gas landscape while strengthening its own market presence.