Gas sales volumes from Shwe offshore area came to 189 billion cubic feet (bcf) in 2022, down 3% from 195 bcf in 2021, according to POSCO International’s recently released results for Q4.
No total or average sales were reported for Q4. However, based on figures reported earlier in the year, it appears sales volumes for the final quarter of the year were around 56.3 bcf.
Source: POSCO International
The company forecasts production at Shwe for 2023 to be 183 bcf.
We note that POSCO International recently relaunched, having completed a merger with POSCO Energy, which encompasses POSCO Group’s generation assets.
The growth plan for Shwe going forward will be to continue developing the project on schedule, including completion of Phase 2, encompassing the drilling of seven new production wells, and timely implementation of Phase 3.
In terms of operating profit, POSCO International’s Myanmar gas business earned KRW350bn in 2022, nearly double the KRW181bn recorded in 2021.
The increase can be mainly attributed to a higher average gas sales price, $8 per MMBtu this year compared to $6.6 per MMBtu in 2021, as well as an improved cost recovery ratio of 33% compared to 25% last year across the company's entire gas business.
Capital expenditure for the company’s energy business as a whole came to KRW724bn. From 2023 to 2025, the company plans to spend KRW3.8tn on its LNG trade, gas production and green energy businesses.
POSCO International recorded overall revenues of KRW37tn, up from KRW34tn in 2021. In Q4 alone, sales revenue came to nearly KRW8tn, a reflection of the POSCO Energy merger.
Operating profit came to KRW903bn in 2022, up 54% year-on-year from KRW585bn previously. Net profit for 2022 came to KRW605bn, nearly double the KRW357bn earned in the same period last year.
About Shwe offshore area
POSCO International is the operator of Shwe offshore area, with a 51% interest in both the A-1 and A-3 blocks. Other partners include ONGC (17%), MOGE (15%), GAIL (8.5%) and KOGAS (8.5%).
The company announced its first commercial-scale gas deposit at Shwe in 2004, and target production of 500mmcfd was reached 10 years later.
Most of the gas produced at Shwe is exported to China via the Southeast Asia Gas Pipeline. Around 20% of output is reserved for domestic use.