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Posco International announced the signing of the HoA for the use of the LNG terminal and a direct pipeline in a stock exchange filing on Thursday.
According to Posco International, the company will provide services to Kospo through the use of the facilities of the Gwangyang LNG terminal and a direct pipeline to be constructed from the LNG terminal to the Hadong LNG combined cycle power plant.
The contract period is from July 10, 2029, to December 31, 2059.
However, the contract period remains “subject to change upon mutual agreement between both parties, depending on the construction schedule of the counterparty’s power plant,” it said.
Moreover, Posco International said the deal is valued at approximately 975 billion won ($637 million).
The contract amount is an estimate of the total terminal and direct pipeline usage fees over the contract period, excluding value-added tax (VAT), it said.
“Both parties intend to make mutual efforts to execute a definitive agreement setting forth the detailed terms and conditions of this HoA by December 31, 2026,” Posco International said.
In 2024, Posco International completed its first Gwangyang LNG terminal in South Jeolla province by adding the sixth storage tank.
The first Gwangyang LNG terminal now has a total storage capacity of 930,000 cbm in six tanks.
Besides LNG tanks, the terminal also features an LPG tank, a jetty, and other regasification and additional facilities.
Posco International said at the time that the construction of the first Gwangyang LNG terminal took 20 years and cost 1.45 trillion won.
This is not the first time that Posco International and Kospo are colaboarating.
Last year, the two firms joined forces to boost the domestic LNG bunkering business.
Through this public-private agreement, Kospo will be able to conduct domestic LNG bunkering via Posco International, starting in 2027.