POSCO Daewoo, an energy unit of POSCO, has signed a contract for KW300 billion (US$267 million) with a consortium of US firms to develop a new gas block in Myanmar.
According to Yo-han Choi of the Communications Department of the company, on June 27, POSCO Daewoo signed the deal in Washington Wednesday with McDermott International Inc. and Baker Hughes GE to develop the Shwe Phyu block in the Southeast Asian country, which is 51% owned by the Korean energy firm.
POSCO Daewoo invested 1.8 trillion won to develop the Shwe and Mya gas blocks until 2013. The company has earned KW250 billion to KW 300 billion worth of operating profit a year from the two blocks since 2013. It has the operation rights of the blocks for up to 30 years from 2013, Choi said.
The latest deal is for engineering, procurement, construction, installation and commissioning (EPCIC) works at the Shwe Phyu gas block. According to Choi, McDermott will be in charge of EPCIC and Baker Hughes GE will provide products and services if the new gas project begins next month.
POSCO Daewoo will supervise the EPCIC works by the two US firms and conduct a drilling job in the new oil block, he said.
POSCO, the world's fifth biggest steelmaker by output, owns a 62.9% stake in POSCO Daewoo.
CEO Kim Young-sang said, “It is very meaningful that we are now working with world-renowned energy companies and would like to give my pledge that I will do my utmost to successfully complete the second-stage development of the gas field and ensure smooth and stable production of gas which some call ‘Cash Cow of Posco Daewooo’.”