Navigating the energy transition with natural gas: an interview with Kim Jong-hyun

While renewable energy sources such as solar and wind are expanding rapidly, concerns about energy security and feasibility slows down an efficient energy transition. In this context, natural gas is often viewed as a cleaner alternative that can help reduce emissions while supporting stable energy supplies. In this interview, POSCO International's process engineer Kim Jong-hyun offered insights to the role of natural gas and the challenges of balancing emissions reduction with energy demand.

First, could you tell us about the work you’re currently doing?

I work at POSCO International on projects related to the Myanmar gas field. I’ve handled development tasks in the past, and now I’m working in production operations, specifically in the media department. As a process engineer, my role is to ensure that most questions can be answered effectively and to maintain smooth communication with executives.

On a typical work day, we receive daily reports from the field in the morning. While reviewing these reports, we monitor key process parameters—such as temperature and pressure of the fluids—as well as sales data. We track trends to see if there are any changes in these values, and if any issues arise, the field team contacts us. We then develop follow-up measures or response plans to address them.

Could you explain why the Myanmar gas field is an important project for Korea and what significance it holds from an energy perspective?

Actually, our Myanmar gas field is not directly linked to our country. About 80% of the gas we produce is exported to western China, specifically the Kunming area, via pipelines with a diameter of about 100 mm. The remaining 20% is used as fuel to generate electricity at power plants in northern Myanmar. Therefore, the benefits to our country are indirect, such as through corporate tax payments made by our company or taxes paid via employee salaries.

Some people who aren’t here might wonder if we could liquefy the gas we produce and bring it back, but in reality, sales contracts for the gas are signed before development begins. Under the terms of these contracts, a specific portion of the gas is designated for sale to a particular destination, and since there is an agreement among the stakeholders, we cannot nullify this or divert the gas on our own to send it to Korea. Also, unlike oil, transporting gas is extremely difficult because it must be liquefied. It has to be cooled to around 160 degrees Celsius to reduce its volume by about 500 times or so and only then can it be transported. So, from an engineer’s perspective, I find that kind of suggestion a bit absurd.

Also, the gas we produce and sell amounts to 500 million supply chain finance (SCF). You might find this unit a bit hard to grasp, but it accounts for about 10% of South Korea’s total gas consumption. Of this, 20% is supplied to Myanmar. The remaining 80% goes to China. If you compare the volume supplied to each country with their respective consumption levels, you can think of it as Myanmar accounting for about 20% and China for about 1%.

CCS technology, which aims to reduce atmospheric carbon dioxide, is currently being widely developed and discussed around the world. I’m curious to know whether this technology has already been implemented and is currently being used for reinjection at the Myanmar gas fields, or whether it’s unlikely to be adopted yet given that it’s a difficult and costly technology.

The thing about CCS is that it cannot be injected directly into active production wells. Instead, it is injected into gas fields where production has already ceased or is nearing the end—essentially, the empty spaces left after the gas has been extracted. Since our gas field is expected to maintain peak production for another 10 years or so, there are no plans for CCS at this time. I imagine the discussion will likely begin about 10 years from now.

In the case of the Donghae gas field, which was operated by the Korea National Oil Corporation, production ceased around August 2021. So, in this case, I’m not particularly interested in whether they’re conducting demonstration studies or actually injecting gas right now, so I’m not sure, but I imagine they’re injecting into gas fields in Southeast Asia that have already been depleted or are nearing depletion, or into oil wells—not into facilities that are currently in production.

Earlier, when you were introducing natural gas, you mentioned that since there’s still time before we transition to renewable energy, it plays a crucial role in that transition. Could you elaborate on why it is important for the energy transition?

With the outbreak of war between the U.S., Israel, and Iran, while South Korea is seeing only minor impacts so far, the Southeast Asian region is being significantly affected. Measures like alternate-day driving restrictions are being implemented, and the air quality here is currently very poor. We have to import oil to generate electricity, but since we’re relying on coal to do so, it’s producing a lot of fine dust and making the air quality very poor.

I’ve heard that fine dust is also becoming a serious problem in South Korea right now. The reason is that China is also importing some oil from the Middle East, but they’re using coal to generate electricity to make up for the shortfall. In South Korea, too, there are quite a few thermal power plants along the West Sea. These plants typically operate at about 80% capacity, but since the war broke out, they’ve been running at 100%, which is causing a significant increase in emissions of carbon monoxide and fine dust. So, while it might be a bit too blunt to say this outright, I believe that relying on natural energy sources like this is still a bit premature.

A prime example is the UK right now. If you look back at 2021, during the pandemic, the UK was relying entirely on wind power for its energy needs. This was around 2019–2020, but then the Russia-Ukraine war broke out, and on top of that, there was a period of poor wind conditions and other weather anomalies, causing electricity prices in the UK to rise by about four or five times at that time. So, if we switch to this too abruptly, it seems like there will be a lot of side effects, so I think it’s better to proceed slowly.

South Korea, in particular, is somewhat energy-poor—we don’t produce gas or oil, and our land area is limited, so introducing green energy is quite restricted. Plus, solar power and similar sources aren’t that efficient. Even among people I know who’ve installed and operated solar panels themselves, they say maintenance isn’t easy.

It seems everyone agrees that there are still challenges to fully implementing renewable energy everywhere. However, since natural gas is still a fossil fuel, and given that the trend toward carbon neutrality is becoming more prominent, could you tell us about any efforts you’re currently making to conserve energy or reduce carbon emissions while operating these gas fields?

First of all, here in Myanmar, there aren’t any strong guidelines mandating carbon reduction or environmental protection. However, from the company’s perspective—especially for large corporations like ours—we engage in a lot of ESG activities. As part of these efforts, we monitor our carbon emissions and are required to disclose detailed information about them. If you visit our company’s website, you’ll find that our ESG activity reports are publicly disclosed there.

Additionally, we recently installed a gas-fired power generator. The specifications for this generator include features that minimize emissions of environmental pollutants such as NOx and SOx. By introducing such equipment, we are maintaining this level of management even from an external perspective.

Finally, do you have any personal thoughts on how you’d like to see carbon reduction achieved? Or how do you think we can strike a balance between pursuing eco-friendly activities and maintaining your operations?

There are actually many ways to do this. Yes, since it involves costs, we’re not doing it right now, but measures like increasing efficiency or reducing the amount of carbon dioxide in the gas to lower emissions altogether are already being implemented in countries with stricter environmental regulations, such as Australia and the UK, as far as I know. So, I think we’ll likely adopt those approaches. I understand that in Korea, as part of efforts to protect the environment—or rather, to reduce carbon emissions—they are operating systems like heat recovery. I think that if necessary, we could invest in and introduce such systems to reduce our carbon emissions.