OREANDA-NEWS. April 16, 2014. POSCO Green Gas Tech, a subsidiary designed to operate the country`s first SNG (Synthetic Natural Gas) plant, held its founding ceremony.

POSCO Green Gas president Sanghong Lee, Gwangyang Steelworks head Seunggwan Baek, POSCO Engineering and Construction Co., Ltd executive director Gyuseong Yeon, and POSCO Energy director Yonghui Cho were in attendance at the ceremony in Gwangyang.

POSCO Green Gas Tech will handle everything related to SNG, from the purchase of coal through the production and sale of Synthetic Natural Gas (SNG).

In June 2011, POSCO began construction of an SNG plant with an annual production capacity of 500,000 tons, and since then, has kept a zero injury record with thorough construction management. Once construction is completed this August, POSCO will make a trial run and begin commercial production in January 2015.

SNG is produced by converting low-cost coal into gas at high temperature and pressure, which is then refined and goes through a synthesis process, and can be a direct substitute for Liquid Natural Gas (LNG) as both have the same components.

As part of the government`s New Growth Smart Project promoted for low-carbon green growth in September 2009, it is expected that SNG will substitute for LNG, production of which has been dependent on imports, and create a 200 billion won import substitution effect, once the SNG plant is brought into full operation. This project represents much to the POSCO Family in the sense that it takes the initiative as the first SNG project in Korea.

`By running the SNG plant in a stable and efficient manner, we will make contributions to the energy security of Korea and large-scale job creation while invigorating the industries involved. We will secure core technologies in partnership with small and medium-sized businesses, localize overseas-originated technologies and thus, pave the way into the global market`, said president Sanghong Lee.

Moreover, POSCO Green Gas Tech plans to install a state-of-the-art enclosed silo for coal storage and advanced refinement facilities to run the plant in an environmentally friendlier fashion, with pollutants like dust, Sulfur Oxides (SOx) and Nitrogen Oxides (NOx) kept to a minimum, while working to ensure the goal of achieving a surplus in the first year.

Meanwhile, POSCO is pushing forward with its clean energy development project in Mongolia in addition to the Gwangyang SNG plant. POSCO, in partnership with MCS, the largest private company in Mongolia, is now working on a Coal to Liquid (CTL ) fuel development project, which produces synthetic gas made from hydrogen and carbon monoxide using low-quality coal and in doing so, eliminating pollutants. It plans to complete financing by the end of this year and complete plant construction by 2018.

This CTL project has a process which is 75% similar to the POSCO Green Gas Tech SNG plant.

While Mongolia is one of the world`s top 10 resource-abundant countries, it depends on Russia for its main energy source, oil, and as a result of rapid economic growth, oil usage is predicted to reach 3,500,000 tons by the year 2020.

In this regard, Mongolia expects that this CTL project will contribute to reducing atmospheric pollution and further, substitute for imported fuel.