POSCO to supply steel, import 1 mil. tons of LNG annually in Alaska project

POSCO International CEO Lee Kye-in, third from left, poses with Glenfarne CEO Brendan Duval, fourth from left, during a signing ceremony for their agreement for the Alaska liquefied natural gas project in Washington, Dec. 1. From left are U.S. Congressman Nick Begich, U.S. Secretary of the Interior and National Energy Dominance Council
Chairman Doug Burgum, Lee, Duval, U.S. Secretary of Energy and National Energy Dominance Council
Vice Chairman Chris Wright and U.S. Senator Dan Sullivan. Courtesy of Glenfarne

POSCO International, a trading unit of steel giant POSCO Group, has finalized its partnership with the United States Alaska liquefied natural gas (LNG) project, agreeing to supply steel for pipelines and import 1 million tons of LNG every year.

POSCO International said Friday its CEO Lee Kye-in and Glenfarne CEO Brendan Duval signed definitive agreements finalizing the two sides’ strategic partnership on Alaska LNG during a ceremony in Washington on Dec. 1.

Glenfarne is the lead developer of the $44 billion project to build a 1,299-kilometer-long pipeline for LNG export.

As part of the agreement POSCO will supply “a significant portion of the steel” required for the 42-inch pressurized natural gas pipeline.

The agreement also includes a 20-year Heads of Agreement (HOA) on supplying 1 million tons of LNG to POSCO International on a free-on-board basis, meaning the seller will cover the costs to the point LNG products are loaded onto a ship.

The HOA establishes commercial terms for the sale of LNG to POSCO International, and is the first HOA signed for Alaska LNG. An HOA is usually a nonbinding document that outlines the key terms of a deal before its official legal contract.

POSCO International will also make a capital investment of an undisclosed amount in Alaska LNG before the final investment is decided.

“POSCO Group is one of the world’s leading steel and energy companies, and their commitment to Alaska LNG reflects the high degree of support in Asia and across the Pacific for unlocking this valuable source of abundant, competitive LNG,” Duval said. “Our partnership represents an important milestone in Glenfarne’s progress developing this project, backed by strong industry support and engagement.”

The deal marks a milestone for POSCO Group, as it enables the company to leverage both LNG and steel, its core business areas.

For its LNG business, POSCO International last year completed its first LNG terminal in Gwangyang, South Jeolla Province, after investing 1.05 trillion won ($714 million) over the past 20 years. The company also invested an additional 950 billion won to complete the second terminal by 2026. Once completed, the total storage capacity of the Gwangyang site will reach 1.33 million kiloliters.