POSCO announced yesterday that its board of directors approved plans to invest 1 trillion won ($864 million) to build a synthetic natural gas production plant by 2013.
Synthetic natural gas is gaseous fuel that has the same composition as natural gas produced through gasification of coal by heating the solid fuel under high pressure.

The plant, which will be built by POSCO Engineering and Construction Co., will be located within the steelmaker's facilities in Gwangyang, South Jeolla Province.

According to the company's estimates, the synthetic natural gas plant will cut the costs of importing natural gas by 200 billion won, as coal is cheaper than natural gas.

The company said that while the synthetic natural gas plant's output will be used within the Gwangyang steelworks, it will also sell the fuel to power companies.

The steelmaker said that POSCO Engineering and Construction is looking to use the project to establish the basis for entering overseas markets for synthetic natural gas plants.

According to POSCO, the market for synthetic natural gas production facilities has high potential for growth, with 10,000 such facilities in operation in the United States alone.

Source: The Korea Herald (October 17, 2009)