NEXT Energy, with KOGAS

www.kogas.or.kr
 NEO EXCELLENT TRUST with KOGAS

Better energy
Better world
KOGAS has been supplying natural gas safely and reliably
for 37 years to improve convenience in lives of citizens and playing
a key role in transition to eco-friendly energy. Contents
KOGAS will continue to lead the world energy industry and build
a better world by creating future value for energy. 12 CEO Message
14 Vision KOGAS 2025
16 KOGAS History

18 NEO with KOGAS

- Domestic Natural Gas Business
- Eco-friendly Fuel Transition Projects
- Hydrogen Energy
- KOGAS Research Institute

32 EXCELLENT with KOGAS

- Overseas Resource Exploration Projects
- Overseas Resource Development & Production Projects
- Overseas LNG Projects
- Overseas Infrastructure Projects

44 TRUST with KOGAS

- Safety & Environmental Management
- Ethical & Human Rights Management
- Win-win Cooperation
- CSR Activities
- Financial Results
2020 NEXT Energy, with KOGAS
CEO message
As a provider of green energy that contributes to improving the quality
of people's lives through the safe and reliable supply of natural gas,
Korea Gas Corporation (KOGAS) has been growing with stakeholders by
engaging in activities aimed at fulfilling corporate social responsibilities.
KOGAS operates the world’s largest LNG storage facilities which
consist of 74 tanks with a total capacity of 11.56 million kiloliters and
transmission pipelines with a total length of 4,908 km. With the start of
natural gas supply on Jeju island, KOGAS has ushered in the new era of
nationwide natural gas supply and has emerged as a global energy
corporation performing 24 projects in 13 countries across the world.
Recently, due to the global economic slowdown and frequent
international conflicts, the world is seeing more uncertainties now than
ever before. The international energy security order is experiencing
a major upheaval as well: major global oil and gas companies are
taking active and preemptive actions in response to the global and
epochal demand for reduction in greenhouse gas (GHG) emissions
and transition to a low-carbon economy and renewable energy.
In South Korea, the government’s eco-friendly energy plans have
led to expansion of the role of natural gas as an energy source for
power generation as well as for transportation, and the natural
gas market is transforming into a consumer-oriented competitive
market participated by various stakeholders.
In keeping with such environmental changes, KOGAS is dedicated
to fulfilling its mission of economic and efficient supply and demand
management and safe supply of natural gas, while consolidating
all-out efforts and wisdom of all employees to make 2020 the start
year for another robust growth.
Dear customers,
Based on our world-class natural gas infrastructure in South Korea,
KOGAS will work toward developing an eco-friendly energy business
model that can maximize synergy in connection with existing natural
gas projects. KOGAS will fulfill its role as a leading corporation in
hydrogen business by actively investing in the entire value chain,
including production of hydrogen, establishment and operation of the
hydrogen supply chain, and distribution of hydrogen energy, as well as
President and CEO of Korea Gas Corporation
12 NEO EXCELLENT TRUST with KOGAS 13
achieving relevant technological self-reliance to lay the groundwork
for an economically feasible hydrogen industry. KOGAS will not only KOGAS will always
pursue investments in establishing hydrogen infrastructure and
related fields to vitalize LNG bunkering projects and to promote the stand by the people
deployment of LNG-powered heavy-duty trucks, but also identify
and create new energy businesses such as hydrogen fuel cells. of South Korea to
In line with South Korea's New Southern Policy (NSP) aiming to expand make tomorrow
cooperation with the Association of Southeast Asian Nations (ASEAN),
including countries such as Vietnam and Indonesia, KOGAS will actively
seek overseas business opportunities to broaden its scope of business
better and brighter.
while helping private Korean partners enter the ASEAN market
by utilizing its domestic experience in constructing and operating
natural gas infrastructure and its know-how on LNG procurement.
As part of our all-out efforts to provide impetus for sustainable growth,
KOGAS will independently analyze economic feasibility and risks, and
thoroughly verify technologies based on the expertise and capabilities
acquired from its previous experience of overseas investments and
operations, instead of relying only on information provided by major
global companies, and then selectively invest in competitive projects.
Also, KOGAS is committed to shared growth and fair trade with
small and medium enterprises (SMEs). By identifying a wide array
of best practices in resolving SME’s financial difficulties, developing
technologies, strengthening competitiveness and localizing equipment
for SMEs, KOGAS will solidify its position as a representative public
institution promoting shared growth and fair trade with SMEs. KOGAS
will not stop at just providing financial support, but go above and beyond
by building a human rights management system that respects the
human rights of SME’s employees as equal partners. KOGAS will
lead by example in resolving the South Korean economy's structural
problems through shared growth and fair trade with SMEs.
The most important mission for KOGAS is to ensure that people
can use natural gas without having any worries. KOGAS will
continue to strive to remain Korean people’s partner and raise
the national competitiveness of South Korea by maximizing
customer values and supplying the highest quality energy.
 2020 NEXT Energy, with KOGAS 14 15

VISION KOGAS 2025

VISION

NEXT Energy, with KOGAS BETTER ENERGY, BETTER TOMORROW

KOGAS is committed to serving the world
as a reliable provider of excellent energy resources and services.

Change for the Future Stay open-minded to lead Vision & Goal
positive changes while
Open mindedness
Striving for the best pursuing excellence
Cost reduction by KRW 6 trillion Identification of new gas
demand of 7 million tons
CHANGE

Realize success for all Creation of 90,000 jobs Top rating in business
through partnership integrity
based on mutual
respect and fairness
Change

4 Strategic 12 Strategic Tasks

Re

Directions
sponsibility

Social Greater emphasis on public benefit Delivering overseas business results Natural gas leadership in Northeast Asia
Trust

Leadership in · Preemptive supply management · Strengthened business fundamentals · Launched “Northward” cooperation
Trust in People TRUST RESPONSIBILITY Responsibility · Improved cost competitiveness in natural gas and core competencies project to diversify gas procurement
Mutual respect natural gas · Improved supply stability and facility · LNG business with focus on operations · Establishment of Northeast Asian
Doing the right thing business
Fairness operation efficiency · Infrastructure-led gas export cooperation network
Pursuing win-win
relationships
Facilitated fuel transition Strengthened R&D on future energy
New energy business promotions technology
Transition · Tax law and policy reform to expedite
Challenge · Hydrogen business infrastructure
fuel transition · Improved R&D process
to green energy construction
· Fuel transition promotion in · Establishment of open and collaborative
· Fuel cell business promotion
transportation innovation-driven growth system
Pursue balanced
CHALLENGE

Strengthened EHS management

Grow into a global company
through unceasing creativity and
strong implementation
Implementation-oriented
growth between Greater win-win cooperation
Job creation and sharing · Advanced disaster response and safety
the company and · Strengthened universal energy welfare
management system
the society by
Realization of · Creation of quality jobs · Leadership in cooperation and mutual
· Strengthened safety management in
social value · Promotion of equal opportunities growth with local partners
production and transmission
promoting integrity and anti-discrimination · Promotion of human rights conscious
· Efficient management of carbon emission
and win-win growth management
permits and GHG emission mitigation
Globalization and make positive
Self-reinvention contribution to the Sophisticated ICT-based
Innovation in working style
Korean energy Improved financial stability management system
Restructuring · Restructuring for greater efficiency and
industry · Sophisticated cost management system · Enhanced IT operation system and
openness
for the future · Establishment of HR system centered
· Strengthened financial structure and information security
risk control · Establishment of smart facility
on job types and performance
management system
2020 NEXT Energy, with KOGAS 16 17

KOGAS HISTORY
2000's - 2019
Rising as a Global Competitor

Leading the World Energy 2002. 10 Completion of Tongyeong Terminal Division 2014. 03 Successful hosting of Gastech 2014

Industry to a New Horizon 2002. 11

2004. 01
Outset of natural gas supply to Gangwon region
Natural gas supply expanded to 10 million households
2014. 10
2014. 10
Won the bid to host World Gas Conference 2021
Relocation of KOGAS HQ to Daegu
KOGAS has been pursuing energy welfare for the people 2005. 08 Equity investment in Myanmar A-3 Gas Field 2015. 10 Outset of LNG shipment for GLNG project in Australia
for the past 37 years as it led the energy industry of South Korea. 2006. 07 Number of natural gas buses exceeds 10,000 2016. 01 Declaration of “KOGAS 2025” Vision
KOGAS will now lead the world energy industry to a new horizon 2008. 02 Enter into MOU for a joint venture for Uzbekistan Surgil Project 2016. 06 Confirmation for construction of Jeju pipeline network
to become the global standard for energy enterprise beyond Korea 2009. 10 Equity investment in on/offshore pipelines for Myanmar Gas Fields 2017. 06 Mozambique Area 4 LNG facility investment final
as the paradigm shifts towards eco-friendly energy. 2010. 01 Incheon Terminal Division reaches 100 million tons of decisions made
natural gas production 2017. 09 Completion ceremony of Samcheok LNG Terminal
2010. 01 Secure development and production rights for Zubair 2018. 03 Naming ceremony of KC-1 LNG carrier
and Badra Oil and Gas Fields, Iraq 2018. 03 5th terminal confirmed for the Seokmun National
2010. 10 Secure development and production rights for Akkas Industrial Complex in Dangjin, Chungnam
and Mansuriya Gas Fields, Iraq 2018. 08 Consecutively listed in DJSI Asia Pacific Level for the 6th year
2011. 03 Named the “World’s Most Admired Energy Corporation” 2018. 12 Received Korean Grand Management Award
by Fortune Magazine (No. 4 in energy section) 2019. 05 Selected as the “Most Outstanding Institution in

1990's
2012. 10 Presidential award of National Sharing Grand Award Disaster Management Assessment” by the Korean
2013. 02 Received grand prize from Korean Ethical Management Ministry of the Interior and Safety (Presidential citation)
Award in public corporation category 2019. 10 Outset of supplying natural gas to Jeju LNG Station
Expansion and Growth
th
2013. 08 30 anniversary of KOGAS

1990. 05 Establishment of KOGAS Research Institute

1980's 1993. 07 Outset of natural gas supply to central region

(Daejeon, Cheonan, Cheongju)

1994. 06 Sailing of national cargo ship for LNG transportation

Building the Foundation 1995. 11 Outset of natural gas supply to Yeongnam and
Honam regions
1983. 08 Establishment of KOGAS
1996. 12 Outset of natural gas supply to Busan
1986. 10 First import of LNG
1997. 10 Completion of Incheon Terminal Division
1986. 11 Outset of natural gas supply for power
1999. 10 Outset of natural gas supply to west coast regions
generation (Pyeongtaek Power Plant)
1999. 12 Listing of KOGAS on Korea Exchange
1987. 02 Outset of natural gas supply for city gas
1999. 12 Outset of natural gas supply to southern region
(Seoul-Metropolitan Area)

1987. 04 Completion of Pyeongtaek Terminal

Division and supply facilities
2020 NEXT Energy, with KOGAS 18 NEO EXCELLENT TRUST with KOGAS 19

NEO WITH KOGAS

Leading a New World

of Energy
KOGAS achieves stability in demand and supply of natural gas
through consistent demand projection and production management
to supply natural gas safely and reliably to the people of South Korea.
KOGAS will actively promote various domestic and overseas projects
and development of eco-friendly technology to establish new and sustainable
growth engine for the era of future energy and transition to eco-friendly energy.
2020 NEXT Energy, with KOGAS 20 NEO EXCELLENT TRUST with KOGAS 21

Contributing to the Economy and

Improving Convenience through
Reliable Supply of Natural Gas
Domestic Natural
KOGAS operates its businesses throughout the processes of procurement,
regasification, supply, and sale of natural gas. KOGAS has imported about 34
Diversification of Procurement Portfolio for Reliable LNG Supply

Gas Business
million tons of natural gas from overseas annually for safe and stable supply of
natural gas. Moreover, 74 storage tanks are operated with a total capacity of 11.56
million kl and transmission pipelines with a total length of 4,908 km to continue to
strive for the people to enjoy their energy welfare.
2019 LNG Procurement
(ten thousand tons)
KOGAS has diversified its LNG procurement sources with an aim to ensuring a stable supply
of LNG. KOGAS is planning to establish a branch in the U.S. and actively seek new shale gas
projects for LNG development and procurement and is pursuing a PNG project through strategic
cooperation with Russia. Also, KOGAS is identifying prospective LNG businesses in the Far East
and the Arctic, and specifying the plan to expand into the Chinese market through enhanced

Supplying LNG in
Reliable and Cost-
effective Manner
3,400
natural gas cooperation with China. Furthermore, KOGAS has reinforced the supply stability by
reinforcing the cooperation for LNG procurement between Korea, China and Japan.
About 34 Million Tons of Annual LNG Import
KOGAS has world’s largest LNG buying power and access to the latest market information
by maintaining and reinforcing win-win business relationships with global enterprises to LNG Cargo Ship Operation and Cargo Ship Fuel
reliably supply LNG to Korea. Also, KOGAS has developed an LNG demand forecast model KOGAS has diversified the LNG cargo ships with an aim to ensuring a stable supply of LNG by
to respond to demand changes and to ensure a stable supply of LNG for municipalities and ordering 29 ships. As a result, KOGAS has contributed to the shipping and shipbuilding industry
power plants in Korea. KOGAS has also implemented a range of measures to secure LNG in of Korea. Moreover, to ensure a clean environment and to reduce greenhouse gas and PM
flexible and efficient manner, which enables nimble response to any circumstances. These emissions that may arise during the transportation of LNG, KOGAS has been using low sulphur
include cargo swaps with overseas buyers, short-term contracts and spot purchases. marine gas oil (LSMGO), an eco-friendly fuel.
KOGAS has prioritized price competitiveness in procuring natural gas to decrease
LNG purchase expenses and the reduce financial burden for the people. KOGAS has
Major LNG
implemented the “Heating Value Based Natural Gas pricing” where the company only bills Russia 2,33 million tons
Source Countries
7%
for actual amount used since July 1, 2012 and KOGAS has been promoting the “Differentiated
Tariff System” for new contracting power plants or existing power plant contractors with an
expired purchase agreement, aiming for implementation after January 1, 2022.

USA 3,662 million tons Qatar 11,322 million tons

11% 33% Indonesia 918,000 tons

3%
Brunei 585,000 tons
Peru 609,000 tons

2% 2%
11%
Oman 3,898 million tons
Other 1,181 tons 10%
4% Malaysia 3,56 million tons

17%
Australia 5,669 million tons
2020 NEXT Energy, with KOGAS 22 NEO EXCELLENT TRUST with KOGAS 23

Nationwide Pipeline Network

(As of January 2020)

Seoul District Division

Gangneung
Incheon District Division Yangju Branch Branch

Pipeline in Operation (4,908km)

Gangwon District Branch
New Pipeline in Construction
Incheon
Pressure Booster / Demand Increase LNG Terminal Bundang
/ Power Generation / Emergency Branch Samcheok
Gyeonggi District Division
Response Branch

Management Center in Operation

Pyeongtaek LNG Terminal Samcheok
Pressure Booster LNG Terminal
Dangjin LNG Terminal
(Under Construction)
New Pipeline Construction Office Andong Branch
Pressure Booster / Demand Increase Daejeon & Chungcheong
/ Power Generation / Others District Division
Hongseong Yeongdeok
Branch Yeongdong Branch
Branch
District Division KOGAS Daegu & Gyeongbuk
Branch Jeonbuk District Division Headquarters District Division

LNG Terminal

Ulsan Branch
Busan & Gyeongnam
Safe and Convenient Natural Gas Infrastructure Gwangju & Jeonman
District Division
District Division

World’s Largest LNG Storage Facility Nationwide Circular Pipeline Network for Suncheon Branch

KOGAS has the world’s largest LNG storage facility. As of January
2020, KOGAS has 74 storage tanks (11.56 million kl) and 5 LNG
terminals nationwide and plans to secure additional storage tanks
through construction of new LNG terminals by 2029. Currently,
there is an expansion work ongoing to add 3 storage tanks at
Incheon LNG Terminal (200 thousand kl×3), and Dangjin LNG
Terminal is under construction scheduled to be completed in
2025, which will contribute to job creation and vitalization of the
local economy in the future.
Uninterrupted LNG Supply Yeongam
Branch Sacheon
The nine district divisions reduce the gas pressure to the level
Branch
appropriate for 50 power plants and 33 city gas companies and safely Tongyeong LNG Terminal
supplies the natural gas vaporized from the LNG terminal through the
nationwide circular pipeline network. The pipeline network consists
of commercial circular network to supply gas in reverse direction as
well in case of emergencies such as the shut-down of terminals. With
the completion of the Jeongdong-Cheongju pipeline project, the Jeju LNG Terminal
total length of the main pipeline was extended to 4,908 km and the
number of governing stations increased to 411 as of January 2020.

Incheon LNG Terminal Pyeongtaek LNG Terminal Samcheok LNG Terminal Tongyeong LNG Terminal Jeju LNG Terminal
No. of LNG Storage Tanks Nationwide Circular Pipeline Main pipeline Extension Target • World’s largest gas transmission • World’s largest gas storage capability • Equipped with the world’s • Storage tanks: • Storage tanks:
Network [by 2023]
capacity as a single terminal for a single terminal largest gas storage tank 140,000 kl x 13 45,000 kl x 2
• Storage tank: • Storage tanks: • Storage tanks: 200,000 kl x 4 • Berthing and loading facilities:

74units 4,908 5,112

100,000 ㎘ x 10 100,000 kl x 10 200,000 kl x 9 • Berthing and loading facilities: 1 berth with 65,000-ton capacity
140,000 ㎘ x 2 140,000 kl x 4 270,000 kl x 3 1 berth with 75,000-ton capacity Boil off gas transmission
Total
•

200,000 ㎘ x 8 200,000 kl x 9 • Berthing and loading facilities: 1 berth with 127,000-ton capacity capacity: 120 ton/hr
• Berthing and loading facilities: • Berthing and loading facilities: 1 berth with 127,000-ton capacity • Boil off gas transmission
(11.56 million kl) km km 1 berth with 75,000-ton capacity
1 berth with 127,000-ton capacity
1 berth with 75,000-ton capacity
1 berth with 127,000-ton capacity
• Boil off gas transmission
capacity: 1,320 ton/hr
capacity: 3,030 ton/hr

• Boil off gas transmission • Boil off gas transmission capacity:

capacity: 6,210 ton/hr 4,680 ton/hr
2020 NEXT Energy, with KOGAS 24 NEO EXCELLENT TRUST with KOGAS 25

Smart Operation with New Technology
KOGAS has implemented equipment analysis, diagnosis and
operation system in line with the fourth industrial revolution
(i.e. ICT) to pre-emptively respond to issues related to increase
in operating cost due to the aging of production facilities, and
accidents which may occur at any given time. This will maximize
the efficiency of facility operations and establish an even more
reliable gas supply infrastructure.
Energy Welfare without Blind Spots
KOGAS has conducted a project for expanded supply of natural gas in less-developed
regions by investing about KRW 2.5 trillion since 2008 to achieve balanced regional
development and energy welfare. As a result, the nationwide city gas access rate of 73
percent in 2011 has increased to 92 percent as of January 2020. KOGAS has applied an
optimal supply system with economic feasibility enough to supply small volumes (less
than 5 tons) of LNG to less-developed regions, including Cheongyang, Hapcheon and
Sancheong. Also, work is under way to extend the pipeline network to achieve energy
welfare across the nation without blind spots.

Integrated Inventory Management System Early Warning System for

for Automatic LNG Vessel Assignment Equipment Failure
Pre
Big data based LNG inventory and heating value
ion -e Analyze the operation pattern of equipment
Natural Gas Service Areas
● ●

management by stations ct and predict failures using big data

m
di

● Establishment of an optimal vessel ● Development of a failure prediction program

pti
Pre

assignment program and test operation at Pyeongtaek Terminal Cheorwon Yanggu

ve
Hwawon
Inje
SMART Municipalities with Access to Gyeonggi-do
Natural Gas Supply
KOGAS 2030 (213 municipalities out of 229)
Gangwon-do

Access rate by year Access Rate

Re

92%
Ongjin
Ulleung-do
t
-ti 92%
ric
al

St
90%
me
73%
Power Equipment Diagnosis System Drone Pipe Patrol System Chungcheongbuk-do
● Real-time failure diagnosis and prediction for main power ● Pipeline network monitoring system Chungcheongnam-do
equipment such as cables and transformers using drones for sections where human Gyeongsangbuk-do
● Construction completed for all production plants and 7 cases of access is difficult
2011 2018 2019
power failure and gas supply interruption accidents prevented ● Test-drive in 7 sections (3 more sections
Cheongyang Cheongsong
to be added in 2020)

Jeollabuk-do
Jangsu Hapcheon

Gyeongsangnam-do

Sancheong
Shinan
Jeollanam-do

Namhae
Jindo

Wando

Jeju-do Island
Regions with access
Target regions for service by 2021
Confirmed Area for No Supply of Public Gas
2020 NEXT Energy, with KOGAS 26 NEO EXCELLENT TRUST with KOGAS 27

Leading the Low Carbon Economy LNG-Powered Heavy-Duty Vehicles

KOGAS is engaged in the LNG-powered heavy-duty vehicle project to

as Eco-Friendly Measures improve air quality by converting the fuel from diesel to LNG because 68%
of PM emissions come from the domestic traffic and transport sector.
KOGAS has produced and tested the high-horsepower (400 hp) heavy-duty
cargo vehicle jointly developed with Tata Daewoo and the Korea Association
Eco-friendly Fuel Transition Projects for Natural Gas and Fuel Cell Electric Vehicles in 2018 to demonstrate
the deployability and operating profitability of LNG-powered heavy-duty
KOGAS is contributing to alleviating environmental issues, such as climate change and particulate
vehicles and to diversify the type of LNG-powered heavy-duty vehicles from
matter (PM), while also actively promoting various eco-friendly fuel transition projects, such as
2 to 6 types. KOGAS is planning to achieve 1.2 million tons in the sale of
LNG bunkering and LNG-powered heavy-duty vehicles, that can generate new demand for LNG natural gas by deploying 60,000 LNG-powered heavy-duty vehicles by 2030.
as well as the natural gas air conditioning project, which can serve as an alternative solution for
national electricity supply and demand issue during summer to secure future growth engine. GHP Air Conditioning Fueled by Natural Gas
KOGAS is actively promoting its project of gas heat pump (GHP) air conditioning fueled by
LNG Bunkering System natural gas to resolve the issue of peak demand during summer. GHP air conditioning
As the International Maritime Organization (IMO) amended the limit for sulphur in vessel fuel from 3.5 percent m/m works by using natural gas to fuel the engine instead of electricity (i.e. EHP). Natural
to 0.5 percent m/m in 2020, LNG bunkering system which transfers liquefied natural gas to a vessel for its use as fuel gas can also fuel GHP heating as well, and contribute to stabilizing electricity supply and
is gaining attention. In line with that, KOGAS has established legal basis and institutions for use of LNG as vessel fuel demand by presenting an alternative to electricity consumption. Currently, the Korean
and strived to foster and grow LNG bunkering. As part of such endeavors, KOGAS established a bunkering subsidiary government and KOGAS are continuously contributing to expanding the deployment
to build a bunkering vessel facility at Dangjin Terminal while promoting the deployment of LNG-powered vessels. of GHP air conditioning through various policies and reforms, such as providing
KOGAS won a contract for constructing LNG bunkering system for the global energy enterprise Shell at the end of subsidies for installation, making GHP air conditioning in public institution facilities
2019. KOGAS is planning to establish a plan to construct a bridge to transport fuel transition through this system. obligatory, and incentivizing GHP air conditioning installation in large buildings.

1.36 Million Tons of LNG Bunkering by 2030

The Korean government announced the “LNG Vessel Related LNG Bunkering Demand Projection
(Unit: 1 million tons)
Industry Vitalization Plan” (November 2016) to turn IMO regulations
into an opportunity to grow maritime transport, shipbuilding, and Global South Korea

harbor businesses and to reduce marine pollution. It is projected

that 13-30 percent of new vessels in Korea will be built as
LNG vessels by 2030. Therefore, KOGAS is promoting the LNG
46.3~70
bunkering system with the goal of supplying 1.36 million tons of
LNG (reducing about 2,200 tons of PM) for bunkering by 2030.

27.6

16.5

3.43
1.36
0.7

2025 2030 2040

2020 NEXT Energy, with KOGAS 28 NEO EXCELLENT TRUST with KOGAS 29

Leading the Hydrogen Economy: H2

Establishment of Hydrogen Production and Supply Infrastructure
Production and supply of hydrogen are essential to hydrogen economy-based society. A decrease in manufacturing

from Production and Supply to Distribution Hydrogen Production

cost and an optimized transport system through supply facility expansion are especially essential for the vitalization
of the hydrogen economy. KOGAS is planning to construct 25 hydrogen production plants by 2030, and has
Plants (by 2030)
commenced the demonstration project with the hydrogen extractor and refueling station construction ceremony

Hydrogen Energy
25plants at Gimhae Governing Station in January 2020. Also, 500 tube trailers and 700 km of hydrogen pipelines are
scheduled to be constructed by 2030 surrounding the base cities for more effective nationwide hydrogen supply.

As hydrogen draws worldwide attention for high energy conversion efficiency and excellent greenhouse gas reduction, Establishment of Efficient Hydrogen Distribution Structure
KOGAS is leading the way in establishing hydrogen infrastructure for the vitalization of South Korea’s hydrogen economy Stable management and an efficient hydrogen distribution structure must be established for manufactured
in line with future trends. Hydrogen Pipeline hydrogen to maintain appropriate price level and to minimize price differential between regions. KOGAS is
Network (by 2030) currently constructing a hydrogen distribution center (transaction system) for such purpose. In other words,

700
KOGAS will gradually establish an ecosystem by vitalizing transactions and taking factors, such as the
diversification of hydrogen manufacturing methods, into consideration after vitalizing the hydrogen market
One of the most economically feasible and realistic measures for mass production of ㎞
through securing price competitiveness. KOGAS will establish and directly operate IoT-based monitoring
KOGAS, Catalyst for hydrogen is natural gas steam reforming. However, private companies have insufficient as well as transaction systems to improve efficiency and stability for the most optimal transaction system.
Growth of Hydrogen original technology and lack demonstration of utilization, thus only taking a passive

Industry of South stance on endorsing the hydrogen market. KOGAS has gas pipelines and governing
stations nationwide, and can utilize them to establish economic and effective hydrogen
Korea infrastructure as well as distribution network. Therefore, KOGAS has established a legal
foundation to include hydrogen in the scope of its business in 2018, and expanded and
reformed its hydrogen business organization to play its definitive role as the leader of
advancing the hydrogen industry in order to lead the way for South Korea’s hydrogen
economy. KOGAS will grow into a world class energy enterprise by diversifying its portfolio
natural gas and hydrogen—and discovering new markets.
Construction of Natural Gas Reforming Business Models
KOGAS is constructing various business models utilizing hydrogen. Currently, KOGAS is promoting the hydrogen
refueling station project for method of supplying hydrogen to hydrogen refueling stations after reforming the
residual natural gas in fuel cell power plants. Additionally, KOGAS is also carrying out its fuel cell project to
produce electricity and heat by supplying boil off gas (BOG) from LNG production plants to fuel cell power plants.
Such projects, especially the fuel cell project utilizing BOG, will achieve various effects, including reduced LNG
vaporization cost and GHG emissions. KOGAS is also planning to pursue various businesses for LNG cooling and
heating as well as hydrogen fuel cells which utilize vaporized natural gas via LNG-powered cooling and heating.

KOGAS Hydrogen KOGAS will lead the way in vitalizing South Korea’s hydrogen economy by actively
Business Roadmap participating in the entire process from manufacturing and production as well as
distribution of hydrogen to construction and operation of transmission pipelines through
advanced investments and gradual promotion strategies.

“Leading the vitalization of the hydrogen economy through the

Vision
establishment of a hydrogen production and distribution network”

Supply more than 60% of total demand

Goals Preparation Period(until 2022) Expansion Period(until 2030) Leading Period(until 2040)
(Domestic
Demand)
470,000 tons (470,000 tons) 1.73 M tons (1.94 M tons) 3.45 M tons (5.26 M tons)
100% 89% 65.75%

Focus on establishment of Build additional hydrogen production Form a full-fledged hydrogen

hydrogen production plants, plants and refueling stations, and industry ecosystem by advancing
Promotion refueling stations and distribution achieve cost-competitiveness at the the distribution of hydrogen as
Strategies centers to lay the foundation for distribution level to further expand well as diversifying hydrogen
the hydrogen industry ecosystem. the hydrogen industry ecosystem. production and distribution.
2020 NEXT Energy, with KOGAS 30 NEO EXCELLENT TRUST with KOGAS 31

Leading the Future of

Energy Industry with
Technological Innovations

KOGAS Research Institute

KOGAS is securing technological competitiveness in the energy
industry through consistent investment in R&D. The KOGAS
Research Institute is currently developing technologies throughout
the LNG business as well as other various fields, such as utilization
of new and renewable energy sources. Such continued technological
innovations play a vital role in KOGAS leading the technology in gas
industry and pioneering overseas energy markets.

Established in 1990, KOGAS Research Institute quickly became a leader in Main Research Areas
KOGAS Research comprehensive energy research in South Korea. It covers R&D areas from natural
As a provider of mission-oriented technological solutions, KOGAS Research Institute has been conducting a wide range of
Institute Research gas exploration and development to distribution. Everyone at the institute is dedicated
research, focusing on the development of core technologies and securing of future technology in the following business areas:
Specialists for to developing core technologies and contributing to an even brighter future for South
Korea's energy industry. As of 2020, over 100 researchers are working laboriously on
utilizing, producing and storing hydrogen; securing leading technologies in new energy industry to develop core technologies

Technological practical technologies which are already in clear demand, with the aim of strengthening
for fuel cell and carbon reduction; providing technologies, such as gas letdown generators, LNG carriers and bunkering for
utilization in new growth industries; and providing on-site support as well as advancing technologies for production and supply.
Innovation South Korea's energy security and competitiveness in energy technology. KOGAS
Research Institute will continue to contribute as a technology leader by focusing on
technologies ranging from clean energy for transport as well as hydrogen fuel cells to
LNG bunkering systems, utilization of wasted energy from LNG cooling and heating
as well as depressurizing, and advanced natural gas utilization using fourth industrial
revolution technologies. New Energy LNG Utilization Foundation Business

●
Hydrogen supply ●
Localization of gas ●
Development of pipeline
letdown generators inspection robot
R&D Personnel R&D Expenditure [2019] ●
Hydrogen storage and transport
●
LNG bunkering system ●
Safety technology such
●
Hydrogen usage
as equipment integrity and
●
LNG carrier
●
Fuel cell earthquake-resistance

106 KRW 56.8 billion

●
Fusion energy system ●

●
Equipment lifespan prediction
Operation of Korea Laboratory
Accreditation Scheme (KOLAS)
2020 NEXT Energy, with KOGAS 32 NEO EXCELLENT TRUST with KOGAS 33

EXCELLENT WITH KOGAS

Global KOGAS,
Shining Brighter Worldwide
KOGAS has been consistently promoting various overseas projects, including resource
exploration projects, resource development and production projects,
and LNG projects to achieve energy independence for South Korea.
KOGAS is especially focused on establishing infrastructure for technological cooperation
with the ASEAN member states with South Korea’s New Southern Policy.
KOGAS will become the leader of the New Southern Policy through having accumulated
LNG terminal operation experience and securing independent technological capabilities.
2020 NEXT Energy, with KOGAS 34 NEO EXCELLENT TRUST with KOGAS 35

Exploring the
Future for the Next
Generation

Overseas Resource
Exploration Projects
KOGAS is striving to secure resources for the
reliable access to natural gas for all South Korean
citizens despite the country’s high dependence
on energy import. KOGAS has been continuing its
overseas resource exploration projects through
careful investments with a sense of duty to seek
energy that will serve as the foothold for national
advancement. KOGAS will not stay idle in the
present, and continue to explore the future for
the next generation.

Area 4 Exploration in Mozambique
KOGAS has discovered a massive gas reserves of 85 trillion cubic
feet (Tcf) in raw gas available in 2014 after purchasing 10% of
equity in Area 4 gas field in Mozambique in 2007. Currently, Area 4
Raw Gas in Area 4, Mozambique
is under development in sequence divided into 6 areas with other
(1.92 billion tons)
participants (e.g. ExxonMobil and Eni S.p.A.).
Offshore Gas Field [#2, 3, 9] in Cyprus
In January 2013, KOGAS acquired a 20% share of offshore gas field
#2, 3 and 9 in Cyprus for resource exploration and distribution.
The project viability is currently being examined through drilling of
exploratory wells, until January 2021.
Offshore Gas Field [E] in East Timor
In 2007, KOGAS purchased a 10% share of five offshore gas fields
(A, B, C, E, H) in East Timor, owned by Eni, an Italian multinational
oil and gas company. Currently, the feasibility of the gas fields is
being analyzed with drilling at one exploratory well.

85 Tcf
East Timor

Mozambique

Cyprus
2020 NEXT Energy, with KOGAS 36 NEO EXCELLENT TRUST with KOGAS 37

Reinforcing Energy
Security through
Overseas Resources

Overseas Resource
Development & Production
KOGAS is promoting overseas resource development and
production to reinforce South Korea’s national energy
security. KOGAS is mainly taking stake in mining rights
or participating in equity of gas and oil fields to develop
and produce oil and gas buried underground. Overseas
resource development and production especially require a
long period of time until profit is generated; thus, KOGAS
is focused on securing profitability and substantialization.

Horn River (Canada)
In February 2010, KOGAS acquired a 50% ownership stake in the
Kiwigana gas field in the Horn River for non-conventional natural gas
resource development in Canada and LNG procurement from North
America, and its business operations is managed stably as of present.
Umiak Gas Field (Canadian Arctic) Surgil Gas Field, Akkas and Mansuriya Gas Fields (Iraq)
KOGAS owns a permanent development license for the Umiak Uzbekistan KOGAS won the international bid for development held by the Iraqi
gas field, which is located northwest of the town of Inuvik. KOGAS government in October 2010. The development contract was signed in 2011.
has completed environmental impact monitoring and is currently Gas field Production targets for Akkas and Mansuriya gas fields are 2.1 Tcf and 1.68
conducting a feasibility study for gas pipeline construction. development Tcf, respectively, over 20 years between 2011 and 2030.
collaboration

A-1/A-3 Gas Field (Myanmar)
KOGAS owns an 8.5% ownership share of A-1/A-3 gas fields
offshore northwest of Myanmar, which has an estimated reserve of
3.3 Tcf (in 2P). After its official commercialization in November 2009,
production began in November 2013 after completion of production
wells, platforms, and off/onshore pipelines. Production level has
been successfully stabilized and daily production reached 500
MMscf (in Ilsan) in December 2014 for sales in China and Myanmar.
Zubair and Badra Gas Fields (Iraq)
KOGAS passed the pre-qualification process to participate in
the bid organized by the Iraqi government in 2009. KOGAS won
the Zubair project in partnership with Eni, an Italian oil and gas production/sales
company, and the Badra project in partnership with Gazprom
Neft, a Russian oil and gas company. KOGAS began to recover
its investment in the Zubair and Badra projects in 2011 and
2015, respectively.
Surgil Gas Field (Uzbekistan)
Gas to
petrochemical In March 2008, KOGAS founded a joint venture, Uz-KOR Gas Chemical, to
develop a natural gas field in Surgil, in partnership with Uzbekneftegaz, the
national oil and gas corporation of Uzbekistan. It has been supplying gas
and exporting gas chemical products to Uzbekistan after completing the
construction of gas chemical plant in May 2016.
Natural gas
sales

Zubair Project Capital Recovery Rate [as of Dec 2019] Badra Project Capital Recovery Rate [as of Dec 2019] Senoro Gas Field (Indonesia)
KOGAS purchased a 9.8% share of the gas field in Senoro, located in
Integrated Sulawesi, Indonesia, which is linked to the DSLNG liquefaction plant project.
resource LNG production has been reliable since it first began operation in June 2015.

108% 48%
development
It is supplying raw material gas to DSLNG and supplying gas domestically to
project
Indonesia.
2020 NEXT Energy, with KOGAS 38 NEO EXCELLENT TRUST with KOGAS 39

Achieving Energy Independence

as a Leader in LNG Business

Overseas LNG KOGAS will lead the way in promoting its LNG business to secure natural gas resources for the
future. KOGAS began its LNG business as a form of equity investment in 1996 and is now striving
Projects to secure competence according to the roadmap for independent development and operation by
2023. KOGAS will contribute to South Korea’s energy independence by pushing forward with its
superior insight in determining business feasibility and execution leading to a successful business.

Coral FLNG (Mozambique)

KOGAS has decided to invest in development of natural gas in the Coral region
of Area 4 gas field in Mozambique (estimated gas reserves of 16 Tcf) through
utilization of floating LNG facility and concluded the FLNG construction
agreement in June 2017. The first LNG cargo production is scheduled at the
end of 2022 after completion of production well drilling and FLNG preparations.

LNG-Canada (Canada)
KOGAS has a 5% share in the LNG-Canada project and its goal is to construct a LNG Production Volume - DSLNG (Indonesia)
liquefaction plant in the western coastal area of Canada so that LNG can be exported
KOGAS Share Only KOGAS acquired 14.975% ownership share in the DSLNG project, which began
to South Korea and other Asian countries. The Canadian government granted a [ten thousand tons] LNG production in June 2015. It has reached an annual production level of
license for 40 years of export operation to the project, and constructed the liquefaction
2 million tons of LNG, 700,000 tons of which is supplied to South Korea.
plant which is scheduled to begin its production in 2024. KOGAS is working to establish DSLNG 2017
37.8 2018
competitiveness for LNG production using the vast natural gas resource in Canada.
36.4
2019
RasGas (Qatar)
In December 1999, KOGAS acquired a 5% share of the RasGas LNG project
32.9
Prelude (Australia) through KORAS, a joint venture set up with private sector partners. The
In March 2012, KOGAS acquired a 10% share of a consolidated LNG project that project, which currently has an annual production volume of 6.6 million
RasGas
aimed to develop small and mid-sized gas fields, including Prelude located 27.1 tons of LNG, is expected to last until 2029.
offshore northwest of Australia, with a floating LNG facility (FLNG). This is the
24.3
first overseas FLNG project in the world that received final investment decision
23.9 OLNG (Oman)
and commercial production is expected to begin in near future. After obtaining the In January 1997, KOGAS invested in a 5% share of the OLNG project through
position as an official participant in June 2012 and beginning its production of first KOLNG, a joint venture founded with a number of private companies. This
LNG cargo in June 2019, the production volume is expected to increase gradually. OLNG
10.3 plant is located 300 km southeast of Muscat, the capital of Oman, and annual
9.9 LNG production has reached 7.2 million tons.
GLNG (Australia) 10.2
KOGAS owns a 15% share of the GLNG project in Australia, which began LNG YLNG (Yemen)
production in September 2015. KOGAS was one of the pioneers in developing In late 2005, KOGAS acquired 8.9% ownership share in the YLNG project, 6% as
GLNG
coal seam gas in Australia. Methane gas which is trapped in the coal seam, is 78.8 a direct overseas investment and 2.9% through a special purpose corporation.
then exported after liquefaction at the LNG plant in Gladstone in the northwest 92.6 The project site is located on the east coast of Yemen and has an annual
coast which is located about 420 km from the gas field. KOGAS will continue to production target of 6.7 million tons of LNG. However, the production has been
92.7
build its capacity to utilize unconventional gas resources. suspended due to civil war and production is scheduled to resume by 2022.
2020 NEXT Energy, with KOGAS 40 NEO EXCELLENT TRUST with KOGAS 41

World-Renown Technology: LNG Terminal Project in Manzanillo, Mexico

This project was commissioned by the Comision Federal de Electricidad (CFE) to switch a coal

A Valuable Asset of KOGAS Responsible for power plant, in the western part of Mexico, to a natural gas power plant with higher generation
capacity. The project received a lot of public attention, as it is of special national importance

10%
of natural gas supply
supplying 10 percent of the total natural gas consumed in Mexico. This project is the very
first overseas LNG terminal project, for investment and technological export, which KOGAS
successfully partnered with private sector companies.
in Mexico
Overseas Infrastructure Projects Cylinder & CNG Refueling Station in Uzbekistan
Overseas infrastructure projects collectively refer to development, investment, operation KOGAS is currently promoting the increase in production volume after beginning its cylinder
of equipment relevant to LNG plants and pipelines to supply natural gas overseas production in 2015. Also, KOGAS has entered into a joint investment agreement with Uzbekistan
along with technical support. KOGAS has been recognized globally through its various in 2010 through domestic consortium, and has launched the CNG business in 2011. CNG business
infrastructure projects based on its accumulative technological know-hows from 30 will be conducted until 2025 and it is currently in operation after commencing commercial
operation of 4 refueling stations in 2016.
years of domestic gas infrastructure business competency.

Gas Supply Project in Maputo, Mozambique

KOGAS won the contract for the Maputo municipal gas project as a Build-Own-Operate-
Transfer (BOOT) project at the request of the Mozambican government. KOGAS established
KOGAS Mozambique in July 2012. In April 2013, KOGAS established ENH-KOGAS, a joint venture
Pipeline Network in
Maputo, Mozambique with ENH, the national gas corporation of Mozambique. ENH-KOGAS successfully completed

82 ㎞
construction which included 62.2 km of pipelines and one control station, and began operation
in May 2014. In December 2014, KOGAS started construction of pipeline expansion into the
Marracuene region and commenced LNG services in June 2015.

Overseas Technical KOGAS has transferred various LNG technology know-hows ranging from test drive to storage tank
Support Projects technology along with its LNG terminal technology which was accumulated for the past 30 years to
many countries, including China, Thailand, UAE, France and Malaysia.

LNG Terminal Technical LNG Terminal Technical Support

Support Projects in China Projects in Other Countries

Educational / Technical Technical Support Projects

Consultation Projects ● Thailand PTT Terminal
● Fujian (2008) ● Jiangsu (2010) Project (2012)
● Zhejiang (2012) ● Qingdao, Tangshan (2013)

● Tianjin (2017)

Test Operation Projects Technical Consultation Projects

● Jiangsu (2010) ● Dalian (2011) ● UAE LNG Terminal (2012)
● Qingdao (2014) ● Guangxi (2016) ● France Dunkirk LNG Terminal (2019)
● Chile GNLM LNG Terminal (2019)

Tank Designing Projects Education / Training Projects

● Jiangsu (2012) ● Jiangsu (2019) ● Malaysia LNG Terminal Education /
Training Project (Aug.–Sep. 2016)
2020 NEXT Energy, with KOGAS 42 NEO EXCELLENT TRUST with KOGAS 43

2
1

3 2
3
4
5 6
2
7
2 3
1
8
4
KOGAS
Global Projects 6
5 9
KOGAS began its global LNG projects as a form of 3
equity investment in 1996, which has since grown into 1
7
the phase of leading independent development and
overall operation. 4
KOGAS continues to push forward with its superior 8
insight in determining business feasibility and
execution leading to a successful business.

03 Resources 09 Resource Development &

Exploration Projects Production Projects 08 LNG Projects 04 Infrastructure Projects

1. Area 4 (Mozambique)
2. Marine Gas Field [#2, 3, 9] (Cyprus)
3. Marine Gas Field [E] in East Timor
1. Umiak Gas Field (Canadian Arctic)
2. Horn River (Canada)
3. Surgil Gas Field (Uzbekistan)
4. Mansuriya Gas Field (Iraq)
5. Akkas Gas Field (Iraq) 1. LNG-Canada (Canada) 5. Coral FLNG (Mozambique) 1. LNG Terminal Project (Manzanillo, Mexico)
6. Badra Gas Field (Iraq) 2. RasGas (Qatar) 6. DSLNG (Indonesia) 2. CNG Refueling Station (Uzbekistan)
7. Zubair Gas Field (Iraq) 3. OLNG (Oman) 7. Prelude (Australia) 3. Cylinder (Uzbekistan)
8. A-1/A-3 Gas Field (Myanmar) 4. YLNG (Yemen) 8. GLNG (Australia) 4. Gas Supply Project (Maputo, Mozambique)
9. Senoro Gas Field (Indonesia)
 NEO EXCELLENT TRUST with KOGAS

TRUST WITH KOGAS

Sharing Ethics and

Warmth with the World
KOGAS is striving to fulfill its corporate social responsibilities
and obligations as the representative energy corporation of South Korean
with aims to achieve and contribute to fuel poverty alleviation,
job creation, win-win cooperation and public trust among others.
KOGAS will create a better world and better energy with the deepest
sincerity to contribute to balanced regional development
and for the livelihood of the people.
2020 NEXT Energy, with KOGAS 46 NEO EXCELLENT TRUST with KOGAS 47

High-Standard Safety
Management:
Building a Safe Society

Safety & Environmental Management

KOGAS has established an advanced safety management system to protect
people’s lives and properties by establishing the first environment, health
and safety (EHSQ) system among South Korea’s public corporations.
Also, KOGAS has maintained its ISO 14001 certification since declaring
environmental management in 1997 and took pre-emptive actions against
climate change to contribute to improving citizens’ quality of life.

From production to supply, KOGAS places safety as top priority all throughout its operations.
Implementation KOGAS has developed and is currently operating an EHSQ management system unique to KOGAS,
of EHSQ which integrates environment safety, health and quality, and prioritizes “humans and respect for
Management nature.” KOGAS has minimized on-site risks by efficiently managing the environmental, safety,
health and quality issues, and improved productivity through this system. KOGAS has been
System
Safety Culture Through Safety Inspection Day
KOGAS has designated the 4th day of every month as Safety Check-up Day, allowing all
employees to conduct the necessary safety checks. In addition, KOGAS has published
Safety Culture Score (ISRS-C)
booklets containing cases of safety incidents and lessons learned, which are distributed to (Global Standard)
all employees to raise awareness on safety management and establish a safety culture.

7.63
recognized internationally by acquiring and maintaining ISO 9001, ISO 14001, ISO 45001 and ISO
29001 among other certifications.
Advanced System for 24-hour Safety Management
KOGAS has implemented an advanced integrated remote monitoring system which
EHSQ Management Operation System (PDCA Cycle) keeps track of the volume, pressure and risks of the nationwide pipeline network
EHSQ of KOGAS is processed to achieve consistent improvement of EHSQ through P-D-C-A 24-hours a day at the Central Control Center. KOGAS also operates a backup
(Plan-Do-Check-Act). monitoring center in order to keep track of the natural gas pipeline operations and
to quickly respond to accidents caused by fire, earthquakes etc.

Action Plan
Management and A Gap analysis and priority Environmental Management and Improvements for Green Energy
improvement decision, personnel KOGAS has been certified with the environmental management system (ISO 14001)
budget and assignment
and the energy management system (ISO 50001) to minimize negative impact on GHG Emission Reduction
the environment throughout its management activities. KOGAS is implementing (as of 2019)
C Continued P
93,000 tons
the low carbon management, including GHG reduction activities to respond to
Process the accelerating climate change. KOGAS is actually independently producing a
part of electricity consumed at the company by implementing solar, wind, and
fuel cell systems for air conditioning and heating. Moreover, KOGAS is actively
Check D Do managing the standards in various fields, such as atmosphere and water quality, by
reinforcing them to be more strict than legal standards and fulfilling its corporate
EHSQ management Document (process)
system execution development and social responsibilities as an eco-friendly corporation by sharing environmental
assessment operation management policies with construction sites and partners.
2020 NEXT Energy, with KOGAS
People-Oriented Ethical Management:
Building a Transparent and Fair Society
48 NEO EXCELLENT TRUST with KOGAS 49
Ethical & Human Rights Management
KOGAS is striving to establish clean and ethical culture within the organization and human
rights management by establishing an ethical and human rights management system, which
induces active voluntary participation and communication from employees. KOGAS will
continue to strive to become a world-leading company in transparency, fairness, integrity
and ethics by achieving people-oriented ethical and human rights management.
Communication & Participation-oriented Ethical/
Human Rights Management System
KOGAS operates an ethics and human rights management department via the Legal Compliance and
Human Rights Management Office to promote systematic integrity, ethics and human rights management
in order to fulfill corporate social responsibilities through transparent and ethical management.
KOGAS has reinforced the integrity and ethical management support considering its employees through
the working-level Q&A communication channel, which serves as a communication channel to resolve
curiosities of employees regarding integrity and ethics. KOGAS has developed and executed bottom-up
oriented participative ethics and human rights policies through policy ideas and exemplary case contests
related to ethics and human rights open to any employee and operation of Corruption Prevention Policy
Committee and Authority Abuse Prevention Plan Committee to establish consensus with its employees.
Moreover, KOGAS also operates the Human Rights Management Committee, where senior management
participates to oversee the plan, assessment, system, and policy regarding human rights management.
KOGAS has also established an independent and effective relief procedure through the Appeal Review
Committee, which is a dedicated review organization along with the "Human Rights Consultation Center.
Platform for Voluntary Participation of Employees in Ethical Management
KOGAS has established a culture where employees voluntarily participate in integrity and ethics
activities through the online ethical management portal “Cheongahan” as well as the “KOGAS CLEAN
POINT” system. Cheongahan, which mainly focuses on communication and participation, is a one-
stop platform for ethical management that internalized the awareness for integrity and ethics among
employees through information, training and communication regarding integrity, ethics, and human
rights. Also, the KOGAS CLEAN POINT system awards outstanding departments and employees by
giving out bonus points to encourage active integrity and ethics activities among employees.
Programs for Reinforcement of Awareness for Integrity, Ethics,
and Human Rights
KOGAS is currently reinforcing the awareness for integrity and ethics among its employees to establish
the culture of integrity by reinforcing the internal and external reporting system to prevent corruption
and conducting customized training for employees, such as executive integrity workshop, visitation
integrity training, public service term training, autonomous field training and cyber integrity training, to
improve basic knowledge in integrity and ethics among its employees. KOGAS has also hosted ethics
events for voluntary participation of employees and produced and distributed a corporate-wide integrity
guidebook to contribute to improving awareness for integrity and ethics among its employees.
2020 NEXT Energy, with KOGAS 50 NEO EXCELLENT TRUST with KOGAS 51

Shared Growth with SMEs and Locals:

Building a Healthy and Fair Society
Shared Growth Procurement
(Unit: KRW 1 billion)

Technological
Development Products
2018 2.8
2019 9.7

Products Made by
People with Disabilities
2018 1.4
2019 2.05
Partner-oriented Shared Growth Value Chain
KOGAS has established and is operating the Shared Growth Subcommittee which is an
executive organization consisting of experts, managers, and partner companies by 4 phases of
Products Made by
Female-Owned Enterprises value chain (Entrepreneurship → Technology development → Competitiveness improvement

Win-win Cooperation
→ Market pioneering) to reinforce the cooperative system for shared growth with the partner
2018 24.6
companies. Also, KOGAS is striving for improvement in technology and competitiveness
2019 22.4
The win-win cooperation transaction model of KOGAS has been selected as an for SMEs through equipment localization through contests, verification tests utilizing the
exemplary case of fair economy by the Korean government as a result of establishing equipment of the company (test-bed), technology transfer, etc. KOGAS has established

and promoting fair trade through the Win-Win Management Committee to establish Discovery of Tasks for various support systems for the partner companies, such as support for innovative

a fair economy system. KOGAS will continue to lead the way for establishment of fair Improvement in Fair Trade growth enterprise through corporate venture capital (CVC), consultations for productivity

25 cases
SMEs improvement for SMEs, liquidity support for improvement in management conditions
economy and establish the support system for its partners.
2018 322.9 for SMEs, vitalization of performance sharing system, expansion of purchase in products
2019 352.2 from SMEs, support for market pioneering through utilization of overseas network, etc.
Establishment of Fair Economy Based on Trust
KOGAS has established the Win-Win Management Committee so that the CEO and SMEs participate
together to lead the way in establishing the best practice for public institutions through discovery and
improvement in unfair trade practices among partner companies and fair economy. Also, KOGAS has
Participation of New and Contract Integrity SMEs Supported Localized Gas Equipment
reinforced the executive capability by regularly operating the Fair Trade Affairs Committee consisting of
Small Enterprises (points)
subcommittees divided based on tasks assigned for fair trade promotion task performance management
and discovery of new tasks. Furthermore, KOGAS has been quickly resolving grievances of SMEs through
mutual procurement innovation through advancement of procurement system, establishment of 145 0.2
9.7
24%

388
481
2.4times
12

delivery performance recognition standards for test-bed verification companies, etc. KOGAS is also
9.5
striving to establish fair economy ecosystem based on trust through expansion of fair trade through 5
alleviation of bid entry barrier and contract guidelines, fair valuation for delivery unit price, expansion
of bidding opportunities for female-owned enterprises, support for growth of partner SMEs, and the
establishment of construction sites where workers’ dignity and values are respected, among more. 2018 2019 2018 2019 2018 2019
2020 NEXT Energy, with KOGAS
Materialization of Win-win with
Local Communities for Consumers
KOGAS achieves win-win cooperation with local communities through
expansion of sustainable quality jobs and citizen proposal projects,
among others. KOGAS has created many jobs through projects, including
construction of Samcheok, Incheon, Jeju production plants and main
pipelines, with the goal of creating 96,000 jobs by 2024. KOGAS is continuing
to expand jobs in the private sector by nurturing startups related to future
businesses, such as utilization of big data in the gas industry (i.e. fourth
industrial revolution), and expanding participation of partner SMEs in
pioneering new projects, such as hydrogen and LNG bunkering.
KOGAS is also discovering consumer-oriented projects by operating
various active communication channels with local communities and
citizens, such as Onnuri Win-Win Committee, Citizen Briefing Session,
and Daegu Society Innovation Platform. Some local projects include
Single Mother Support Project, Happy Home Residential Stabilization
Project, Mobility for the Disabled Utilizing Eco-friendly Vehicles in
which citizens and local communities are currently participating.
Job Creation by 2024
96,575 jobs
52
Establishment of Infrastructure for Vitalization
of Social Economy
KOGAS is engaged in various activities to establish infrastructure for
growth of social economy. KOGAS achieves embracive job creation through
systemic education from specialized institutions, such as Architecture
Academy, Senior Academy and Toy Library, and operation of facilities
in consideration of local residents. Also, KOGAS is exploring plans to
vitalize Onnuri Volunteer Corps through company-wide idea contests
for expansion of voluntary sharing culture among employees and
has expanded the support of employee donation fund Onnuri Fund
nationwide by distributing the funds to each office.
Furthermore, KOGAS has developed a tool to convert the performance of
social value promotion into monetary value to utilize as a key indicator for
performance management of cooperation for coexistence, and is currently
promoting various specialization projects (Relief Factory, Coffee Waste
Pelleting, etc.). Meanwhile, KOGAS is providing emergency support for SMEs,
small business owners and the underprivileged for the revitalization of the
local economy when national emergency disasters occur (e.g. COVID-19).
Citizen Proposals
124 cases
NEO EXCELLENT TRUST with KOGAS 53
Benefiting the Whole World
with Green Energy
CSR Activities
KOGAS has the social contribution brand “Onnuri” to fill the world with
warmth. KOGAS will share hopes and dreams to local communities and the
underprivileged and make the world happier through various Onnuri projects.
Onnuri Love Project with Construction Businesses
Discount for City Gas Fees for the Underprivileged
KOGAS has been reducing gas rates for social welfare facilities since 2001 and for
City Gas Fee Relief households receiving social welfare benefits since 2009. This reduces the financial burden
Welfare Facilities such as for heating expenses by reducing house city gas rates for the beneficiaries.
(17% increase compared to
previous year as of 2019)
KOGAS has discovered new facilities that aren’t receiving benefits through integration
of government’s welfare database and municipal gas companies’ customer information
27,524 database into the “gas rate reduction management system” to establish a more thorough
welfare network. As a result, the number of welfare facilities with reduced rates has
increased to 27,524 (17% increase compared to previous year) as of 2019. KOGAS is also
achieving energy welfare through various welfare systems such as “winter gas supply
interruption deferment system” which defers supply interruption when city gas rates are in
arrears during winter for the households receiving social welfare benefits.
2020 NEXT Energy, with KOGAS 54 NEO EXCELLENT TRUST with KOGAS 55

Mutual Advancement in Daegu: Onnuri Partnership Project

Onnuri KOGAS has been operating the Onnuri Architecture Academy which provides free lessons in
Projects for architecture technology to support independence of the underprivileged in Daegu since 2016. KOGAS
the People is contributing to the independence of the group by providing the opportunity of field practice to the

and the students through connecting the Onnuri Architecture Academy to the house repair projects. Also,
KOGAS has established eight children’s toy libraries in Daegu to provide better childcare environment
Community as well as creating quality local jobs through hiring dedicated personnel.
KOGAS has also conducted job training in fields such as sanitation and needlework through the
“Senior Academy” project for the local elderlies to assist them leading a stable life through tailored
jobs such as sanitation and rental basket production for toy libraries.

Fostering Future Generation: Onnuri Hope Project

KOGAS is awarding scholarships to high school students and college students around its business
sites, and supporting medical expenses for children with rare and intractable diseases and
rehabilitation assistance tools for severely disabled children and youth from socially vulnerable groups
in the blind spots of medical coverage.
The Hope Project has also been launched in regions overseas where overseas resource development
and production businesses are ongoing. KOGAS has improved the educational environment in
Mozambique starting with the construction of elementary school near the capital of Mozambique and
supplying educational materials, and reinforced the independence capability of locals through vocational
training for pipe welding, machinery by opening the vocational training class from 2016 to 2019. Also,
KOGAS has sponsored children with heart diseases in Uzbekistan and Iraq since 2012 for operations in
South Korea and 16 children total have undergone operations at SNU Bundang Hospital until now.

Participative Social Contribution: Onnuri Together Project

KOGAS shares the warmth with neighbors in difficulty through Kimchi sharing, briquette sharing, and such
by organizing the Onnuri Volunteer Corps comprising KOGAS employees. Also, KOGAS supports wide range
of disadvantaged groups such as single mothers, single parents, and multicultural families through the
Onnuri Fund Project, which is funded voluntarily by KOGAS employees for social contribution.
In 2020, KOGAS has newly launched the “procurement of mobility for the disabled utilizing eco-friendly
vehicles” suggest by citizens. KOGAS is leading the way in improvement of mobility for the underprivileged,
such as the disabled, while also actively responding to the environmental pollution issue through this project.

Thermal Efficiency Improvement Project for Thermal Efficiency

Warmer Homes Improvement Project

991low-incomehouseholds
KOGAS has commenced the thermal efficiency improvement
project for social welfare facilities and low-income households in
2010. As a project that supports improvement of energy efficiency
and energy cost reduction for the underprivileged through
construction and repair, KOGAS has supported constructions
for 991 low-income households and 983 social welfare facilities Thermal Efficiency
by investing KRW 17.9 billion in total since 2010. Also, KOGAS is Improvement Project
supporting market pioneering and vitalization of local economy
by employing social economic organizations such as local social
enterprises in construction business.
983 social welfare facilities
2020 NEXT Energy, with KOGAS 56 NEO EXCELLENT TRUST with KOGAS 57

Financial Result

Financial Statement (Unit: million KRW) Key Financial Ratio (Under IFRS Consolidation Standards)
Consolidated Separate Division 2019 2018 2017
Item
37th Term 36th Term 37th Term 36th Term Debt Ratio (%) 382.6 367.1 356.2

Ⅰ. Current Asset 9,232,764 9,924,942 8,427,930 9,120,718 Current Ratio (%) 103.7 100.5 115.1

Ⅱ. Non-current Asset 30,079,090 29,764,749 28,831,584 28,651,130 Return on Equity (ROE, %) 0.7 6.4 -14.0

(Total Asset) 39,311,854 39,689,691 37,259,514 37,771,849 Return on Assets (ROA, %) 0.1 1.4 -3.1

Ⅰ. Current Liabilities 8,900,543 9,871,193 8,648,451 9,680,645 Operating Profit to Sales Ratio (%) 5.3 4.9 4.7

Ⅱ. Non-current Liabilities 22,264,791 21,320,514 21,906,862 21,010,129 ※Net Debt Ratio=Net Debt / Total Capital, Total Capital = Net Debt + Capital

(Total Liabilities) 31,165,334 31,191,707 30,555,313 30,690,774

Shareholding (As of Dec. 31, 2019)
Ⅰ. Paid-in Capital 1,765,113 1,765,113 1,765,113 1,765,113
Division Number of Shares Amount Shareholding Rate (%)
Ⅱ. Earned Surplus 5,397,707 5,497,914 4,293,419 4,351,938 (KRW 1 thousand)
Ⅲ. Hybrid Bond - 308,157 - 308,157 Government 24,144,353 120,721,765 26.15%

Ⅳ. Other Components of Capital 690,525 621,639 645,668 655,867 - Ministry of Strategy & Finance 20,758,110 103,790,550 22.49%

Ⅴ. Non-controlling Interest 293,176 305,161 - - - Ministry of Trade, Industry & Energy 3,386,243 16,931,215 3.67%

(Total Capital) 8,146,521 8,497,984 6,704,201 7,081,074 KEPCO 18,900,000 94,500,000 20.47%

(Total Liabilities and Capital) 39,311,854 39,689,691 37,259,514 37,771,849 Municipalities 7,321,122 36,605,610 7.93%

National Pension Fund 7,322,042 36,610,210 7.93%

ESOA 3,154,243 15,771,215 3.42%

Foreign Investors 10,338,342 51,691,710 11.20%

Statement of Comprehensive Income (Unit: million KRW) Treasury Stocks 4,675,760 23,378,800 5.07%

Consolidated Separate Private Investors 16,457,138 82,285,690 17.83%

Item Total 92,313,000 461,565,000 100.00%
37th Term 36th Term 37th Term 36th Term
Ⅰ. Income (Sales Revenue) 24,982,639 26,185,038 23,903,847 24,985,604
Ⅱ. Cost of Sales 23,227,117 24,508,531 22,354,727 23,547,722 Shares (Based on closing price)
Ⅲ. Gross Profit (Loss) 1,755,522 1,676,506 1,549,120 1,437,882
Division 2019 2018 2017
Ⅳ. Selling and Administrative Expenses 421,008 399,648 363,364 329,183
Highest Share Price (KRW) 54,900 64,500 53,700
Ⅴ. Operating Profit 1,334,514 1,276,859 1,185,756 1,108,698
Lowest Share Price (KRW) 36,900 43,300 40,600
Ⅵ. Other Income 2,967 2,811 7,816 7,401
Outstanding Shares (Shares) 92,313,000 92,313,000 92,313,000
Ⅶ. Other Expenses 57,937 37,827 46,667 36,607
Foreign Shareholding Ratio (%) 11.00 15.01 9.70
Ⅷ. Other Profit (Loss) (465,781) (54,047) (361,774) (110,005)
Ⅸ. Financial Income 450,977 493,830 782,018 747,308
Ⅹ. Financial Cost 1,253,031 1,237,107 1,435,367 1,441,729 Dividends & Intrinsic Value (Under separate standards)
Ⅺ. Profit (Loss) from Partner Companies,
104,667 204,461 20,111 (28,843) Division 2019 2018 2017
Joint Enterprises, and Subsidiaries
Ⅻ. Income Tax Expense (Profit) 58,107 95,517 70,279 (59,089) Dividend Per Share (KRW) 380 1,360 -

ⅩⅢ. Net Profit (Loss) 58,269 526,745 81,614 305,313 Earnings Per Share (KRW) 395 5,766 -13,802

ⅩⅣ. Other Comprehensive Profits/Losses(after-tax) 58,582 (119,056) (26,560) (179,572) Highest PER (Times) 138.99 11.19 -

ⅩⅤ. Total Comprehensive Profits/Losses 116,852 407,688 55,054 125,740 Lowest PER (Times) 93.42 7.51 -
2020 NEXT Energy, with KOGAS 58

NEXT Energy, with KOGAS

Leading the Future Energy

for a Better Tomorrow
KOGAS will continue to keep its promise to make the world
a better place with better energy, and lead the world energy industry
with the love and support from the South Korean people.

Published by Hee Bong Chae | KOGAS

Publisher KOGAS
Address 120, Cheomdan-ro, Dong-gu, Daegu, Korea
Phone (+82)53-670-0114
Designed by H GROUND Co., Ltd.
Photography by Archive Studio, Antenna Studio