Energy,

KOGAS
2018
NEXT

with

2018 NEXT Energy, with KOGAS

270,000 ㎘
Largest LNG storage tank
KOGAS is the leading natural gas company
in South Korea with excellent facilities and
technologies.
20,583 people
2017 Private sector jobs created KOGAS will continue to stand by the people
of South Korea and to fulfill its role as a global
energy corporation, working towards making
the world a better place.
33,000,000 tons
2017 LNG imports
KOGAS is continually expanding its global operation
network in order to efficiently supply natural gas
to meet demand at any time.
 4,790 km
Length of pipeline installed in South Korea
NEXT Energy, with
10 CEO Message

12 KOGAS at a Glance

14 Vision KOGAS 2025

16 KOGAS History

18 Highlights 2017

20 NEO
Ensuring Safety and Satisfaction in a New Energy World

28 EXCELLENT
Expanding Global Operations with Outstanding Infrastructure

40 TRUST
Developed by KOGAS: Technologies for the Future You Can Depend On

48 with KOGAS
Supporting Dreams and Hopes

56 2017 Financial Results

58 KOGAS Overview and Organizational chart

CEO Message
The Korea Gas Corporation (KOGAS) is striving to innovate using the old saying ‘There is no
challenge nor crisis that cannot be overcome if you transform yourself ’ as a guiding principle.
We are committed to build a framework for growth by fully utilizing KOGAS’ experience
accumulated over the past 35 years.
Since its establishment in 1983, KOGAS has strived to
provide a reliable and safe supply of clean-burning natural
gas using the world's largest LNG storage system which
consists of 72 tanks with a total capacity of 11.47 million ㎘
and a natural gas pipeline network spanning over 4,790km.
In addition to sustained effort to make natural gas more
widely available in South Korea, we are also striving to
become a leading global energy company managing 24
projects in 13 countries including 12 exploration, 8 LNG
and 4 downstream infrastructure projects.
Dear customers and investors,
For the past 35 years, KOGAS has faithfully fulfilled its
mission as a leading public energy corporation. However,
uncertainties in global investment and trade are increasing,
with issues such as geopolitical risks, rising interest
rates and fluctuation in oil price. Furthermore, the fourth
industrial revolution is transforming the way we produce,
transport and consume energy, requiring KOGAS to
respond at unprecedented speeds.
First, we will continue to faithfully fulfill our mission to
provide a safe and reliable supply of natural gas to South
Korea. We will also support the successful national energy
transition by procuring natural gas in more favorable terms
and through cost-effective and efficient management of
natural gas supply and demand.
2018 NEXT Energy, with KOGAS 10 | 11
Second, we will endeavor to further improve the financial
performance of existing overseas projects while actively
participating in natural gas infrastructure projects in
overseas markets to realize our vision of becoming a global
LNG supplier.
Third, we will make a proactive effort to promote social
values in safety, the environment, and supplier relations
with more tangible benefits. KOGAS will strive to show
leadership promoting the competitiveness of its supply
chain for win-win growth, in addition to its contribution to
national and regional economies.
Fourth, we will revamp our effort to identify and develop
future growth engines which will create synergy with
KOGAS core capacity. KOGAS will also continue to invest
in the development of new core technologies with high-
added value, building on the technologies developed by
KOGAS.
KOGAS was able to achieve its position today, thanks to
the unwavering support of our customers and investors
like yourselves. We, at KOGAS, will continue to strive to
meet the high expectations of our customers.
President and
CEO of Korea Gas Corporation CHEONG, SEUNG-IL
 KOGAS at a Glance 2018 NEXT Energy, with KOGAS 12 | 13

Along with upstream business areas, such as the exploration and development of natural KOGAS has further diversified its natural gas sources to encompass a larger number of

Overseas gas and oil, KOGAS is also participating in mid to downstream business areas such as LNG nations, in order to obtain an adequate amount of LNG in a timely manner, and therefore

Business natural gas liquefaction projects, operation of LNG terminals, and the construction and Import - Sales be able to provide a stable supply and meet the growing demand in the domestic market. In
operation of gas pipelines. addition, KOGAS has supplied high-quality LNG to a diverse group of customers including
municipal, industrial and power sector clients.

24
Development ∙ Production Business Oil/Gas Resources Secured LNG Import
(Production in 2017) (2017, 2P and 2C) LNG Sales: (2017)
| million tons 4.76 | million tons
39.33 | million tons
Projects 4.42 290
270 260 250 36.33
240 38.67
Exploration: 3
2.82 32.77 33.00
35.17 31.46
Development ∙ Production: 9 2.31 2.26
LNG: 8 31.41 31.84 32.16
Infrastructure: 4
L N G

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

KOGAS has the world-leading LNG storage tank technologies and operation know-how. As of
early 2018, KOGAS is operating 72 storage tanks at four LNG terminals, and has the largest Natural
LNG Storage LNG storage capacity in the world (11,470,000㎘). We are making a sustained effort to expand
Gas Supply
our storage facilities to further ensure stability of a natural gas supply.
KOGAS safely delivers natural gas from its LNG terminals to power plants and municipal
gas companies through its pipeline network. The main pipeline spans 4,790km in length and
provides access to 91 percent of the population in South Korea. KOGAS is committed to
support the growth of the national economy, balanced regional development and a better
quality of life.

No. of LNG
Total Length of Pipeline Network No. of Supply Stations
Storage Tanks

4,790
Total LNG Storage

397
Planned LNG Storage Capacity | million ㎘
Capacity
12.36
72 11.47 million ㎘
11.47 11.57
13.56 ㎞

Total length of the main pipeline to

reach 5,305km with additional 515km
pipeline by 2023

2017 2018 2025 2031

Vision KOGAS 2025 2018 NEXT Energy, with KOGAS 14 | 15

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.

Improve natural Achieve

Change for the Future Improve equity/
Open mindedness
Three
Strategic Goals
gas price
competitiveness by
8 million tons asset ratio by
LNG sales from
Striving for the best
110% new projects 170%

CHANGE

Change
Three Implement
Strengthen Secure
Management performance-
reputation as competitiveness
Directions and oriented

R ES
trusted public in energy
12 Strategic management
Trust in People corporation business
Goals system

P O N SI B ILIT Y
Mutual respect
TRUST

Fairness
Trust Responsibility
Social Responsibility ① Safe and stable ⑤ Improve profitability in ⑨ Strengthen strategic
natural gas supply overseas business and management structure
Doing the right thing
Core Values technological capacity
② Strengthen ⑩ Improve stability in
Pursuing win-win
relationships
customer trust ⑥ Support green energy financial structure
businesses in South Korea
③ Promote win-win ⑪ Cultivate innovative
relationship with ⑦ Position as a global natural corporate culture
suppliers gas provider
⑫ Implement advanced ICT
Challenge ④ Create and share ⑧ Secure energy supply management based on
jobs and lead on supply-side 4th industrial revolution
technologies technologies

C H ALLE N GE
Globalization Vision & Goal
Self-reinvention Ranked as one of the Top 50 Energy Companies
Implementation-oriented among the Fortune Global 500
KOGAS announced a new vision, 'KOGAS 2025', creating a new energy future. We plan to realize our vision guided by the management principles
described with three keywords 'Neo', 'Excellence' and 'Trust'. In order to achieve sustained growth and provide a better service to the public,
KOGAS will do the following.
First, we will strengthen our reputation as a trusted public corporation by fulfilling our social responsibilities and customer-oriented services.
Second, we will improve our competitiveness in the energy business with advanced technologies and by developing new green energy businesses.
Third, we will implement a more efficient management system to improve our business performance.
KOGAS History 2018 NEXT Energy, with KOGAS 16 | 17

BETTER ENERGY, BETTER WORLD

After rapid growth over many decades, the natural gas business in South Korea has reached
maturity, with the transition to a competitive market environment. KOGAS will strive to cope
with the change and continue to garner the respect of the South Korean public.

1983 2018
The 1980’s - The 1990’s - The 2000’s -
Building Expansion and Rising as a Global
Foundations Growth Competitor

1983. 08 Establishment of KOGAS
1986. 10 First Import of LNG
11 Outset of natural gas supply for power
generation (Pyeongtaek Power Plant)
1987. 02 Outset of natural gas supply for city gas
(Seoul-Metropolitan Area)
04 Completion of Pyeongtaek Terminal
Division and supply facilities
1990. 05 Establishment of KOGAS Research Institute
1993. 07 Outset of natural gas supply to central region
(Daejeon, Cheonan, Cheongju)
1994. 06 Sailing of national cargo ship for
LNG transportation
1995. 11 Outset of natural gas supply to Yeongnam
and Honam regions
1996. 12 Outset of natural gas supply to Busan
1997. 10 Completion of Incheon Terminal Division
1999. 10 Outset of natural gas supply to west coast regions
12 Listing of KOGAS on Korean Stock Exchange
12 Outset of natural gas supply to southern region
2002. 10 Completion of Tongyeong Terminal Division
11 Outset of natural gas supply
to Gangwon region
2004. 01 Natural gas supply expanded
to 10 million households
2005. 08 Equity investment in Myanmar A-3 Gas Field
2006. 07 Number of natural gas buses exceeds 10,000
2008. 02 Enter into MOU for a joint venture
for Uzbekistan Surgil Project
2009. 10 Equity investment in on/offshore pipelines for
Myanmar Gas Fields
2010. 01 Incheon Terminal Division reaches 100 million tons
of natural gas production
01 Secure development and production rights
for Zubair and Badra Oil and Gas Fields, Iraq
10 Secure development and production rights
for Akkas and Mansuriya Gas Fields, Iraq
2011. 03 Named the “World’s Most Admired Energy Corporation” by
Fortune Magazine (No. 4 in energy section)
2012. 10 Presidential award of National Sharing Grand Award
2013. 02 Received grand prize from Korean Ethical Management Award in
public corporation category
08 30th anniversary of KOGAS’ foundation
2014. 03 Successful hosting of Gastech 2014
10 Won the bid to host World Gas Conference 2021
10 Relocation of KOGAS HQ to Daegu
2015. 10 Outset of LNG shipment for GLNG project in Australia
2016. 01 Declaration of Vision “KOGAS 2025”
06 Confirmation for construction of Jeju pipeline network
2017. 06 Mozambique Area 4 LNG facility investment final decisions made
09 Completion ceremony of Samcheok LNG Terminal
09 Launch of natural gas supply to Gunsan-Saemangeum area
11 Consecutively listed in DJSI Asia Pacific for the 5th year
2018. 03 Naming ceremony of KC-1 LNG carrier
03 The 5th terminal confirmed for the Sukmun National Industrial
Complex in Dangjin, Chungnam
Highlights 2017
2017.01
Natural gas supply service launched in
Jeongseon and Pyeongchang
KOGAS began supplying natural gas to Gohan and Sabuk
areas of Jeongseon and Pyeongchang in Gangwon
province as a part of preparation for the Pyeongchang
Winter Olympics. The Kangwon Land, which previously
relied on much more expensive LPG before KOGAS
began supplying natural gas, now enjoys a significant
reduction on fuel cost. Residents of the Gohan and
Sabuk areas also benefited from the reduction in fuel
costs as well.
2017.04
Naming ceremony of US shale gas
LNG carrier, the SM Eagle
KOGAS signed an LNG purchase contract with US-
based Sabine Pass in 2012. With an annual shipment of
2.8 million tons of LNG, the 20-year contract began in
July 2017. KOGAS ordered 6 LNG carriers and a naming
ceremony for one of the carriers, the SM Eagle, was
held on 19th April 2017.
2017.06
Investment in Mozambique
Area 4 LNG facility
KOGAS made its final decision to invest in the
M o z a m b i q u e A r e a 4 L N G fa c i l i t y a n d b e g a n
development work. In 2007, KOGAS participated
in the Area 4 exploration project thanks to support
from the South Korean government and successfully
drilled 13 wells by 2014, discovering an estimated
gas reserve of 85 trillion cubic feet. The investment
decision allows KOGAS to develop the Coral gas well
for production of natural gas as well as construction
and operation of a floating LNG facility, creating up to
1,800 jobs on an annual basis.
2017.09
Launch of natural gas supply to
Saemangeum area
KOGAS hosted a ceremony to celebrate the launch of a
natural gas service in Saemangeum area. The Gunsan
Saemangeum Natural Gas Supply Network Construction
Project consisted of a 28.46km long extension of the
main pipeline and three supply stations. The 93.2 billion
KRW project began on July 2014 and was completed
after 33 months, three months earlier than planned.
2017.09
Completion ceremony of
Samcheok LNG terminal
206,141 tons
KOGAS hosted the completion ceremony for
Samcheok LNG Terminal. The project began in 2008
with the engineering design work, followed by
commencement of construction in 2010. Spanning
over The Samcheok Terminal has state of the art
facilities including 12 LNG storage tanks and a
gasification facility with 1,320 ton per hour capacity,
the longest breakwater and LNG carrier port. It will
serve as the 4th LNG terminal in South Korea along
with Pyeongtaek, Incheon and Tongyeong LNG
Terminals.
2017. 12
Successful 100% recuperation of the Iraq
Az Zubayr project capital investment
KOGAS successfully recuperated 100 percent of the
capital invested in the Az Zubayr project through KOGAS
Iraq B.V. The Az Zubayr project yielded 180,000 barrels of
crude oil per day in its first year of production which then
increased to 430,000 barrels per day on average in 2017.
The amount of capital recuperated has reached 2.53
billion USD (accumulated oil production at 43,735,615
barrels), 101.6 percent of the 2.49 billion USD investment
initially made.
2018 NEXT Energy, with KOGAS 18 | 19
2018.02
Setting a new record in
daily natural gas supply
KOGAS has now set a record in daily natural gas supply
three consecutive times on 24th, 25th and 26th January
at 212,897, 219,800 and 224,628 tons respectively. The
previous record was set on 12th January at 206,141
tons. KOGAS conducted a nation-wide inspection of
natural gas supply facilities to ensure a safe and reliable
supply of natural gas during a time of record high
demand.
224,628 tons
219,800 tons
212,897 tons
01. 12 01. 24 01. 25 01. 26
2018.03
Sponsoring PyeongChang 2018
Paralympic Winter Games
KOGAS has provided support to ensure the success
of the PyeongChang 2018 Paralympic Winter Games.
KOGAS employees and their families supported the
national team at the ice hockey game between the
Republic of Korea and the Czech Republic. KOGAS also
made a donation to the Korean Paralympic Committee.
KOGAS has supported athletes representing the
Republic of Korea at many major sports events including
the 2014 Sochi Winter Olympics, Incheon Asian Games
and 2018 PyeongChang Winter Olympics and will
continue to do so.
 KOGAS will always
stand by the people
of South Korea to
make tomorrow
better and brighter.
Ensuring Safety and Satisfaction in a New Energy World

+ LNG Storage Facilities

+ Nation-wide Circular Gas Pipeline
+ Safety Management
+ Environmental Management
NEO Domestic Business EXCELLENT TRUST with KOGAS 2018 NEXT Energy, with KOGAS 22 | 23

Providing Safe and LNG storage tanks allow KOGAS to store large quantities of
LNG for supply during the winter when demand significantly
Nationwide Pipeline Network
(As of March 2018) Samcheok LNG Terminal
Reliable Energy increases. KOGAS is working hard to secure the optimal
number of LNG storage facilities in order to provide a reliable
• Equipped with the world’s largest
gas storage tank

for the World supply of natural gas throughout the year. Incheon LNG Terminal • Storage tank: 200,000 ㎘ x 9,
270,000 ㎘ x 3
• World’s largest gas transmission
capacity for a single terminal • Berthing and loading facilities:
― 1 berth with 127,000-ton capacity
• Storage tank: 100,000 ㎘ x 10,
LNG Storage Facilities 140,000 ㎘ x 2, 200,000 ㎘ x 8 • Boil off gas transmission capacity:
1,320 ton / hr
• Berthing and loading facilities:
1 berth with 75,000-ton capacity,
Incheon District Northern Branch
1 berth with 127,000-ton capacity Division
• Boil off gas transmission capacity: Yeongdong Branch

5,070 ton / hr Seoul District

Division Gangwon District
Division
Central Branch
Yeongseo Branch
Gyeonggi District
Division

Pyeongtaek LNG Terminal Western Branch

• World’s largest gas storage capacity for
Daejeon & Chungcheong Northern Branch
a single terminal
District Division
• Storage tank:100,000 ㎘ x 10,
140,000 ㎘ x 4, 200,000 ㎘ x 9 Eastern Branch
• Berthing and loading facilities:
1 berth with 75,000-ton capacity, Jeonbuk District
Daegu & Gyeongbuk
Division
1 berth with 127,000-ton capacity Headquarters District Division

• Boil off gas transmission capacity: Southern Branch

4,636 ton/hr

Busan & Gyeongnam Ulsan Branch

Gwangju & Jeonnam District Division

District Division

Eastern Branch

Southern Branch Western Branch

Tongyeong LNG Terminal

• Storage tank: 140,000 ㎘ x 13,
200,000 ㎘ x 4
• Berthing and loading facilities:
1 berth with 75,000-ton capacity,
1 berth with 127,000-ton capacity

72 LNG Storage Tanks in 4 Terminals • Boil off gas transmission capacity:

Jeju LNG Terminal (expected completion in 2019) 3,030 ton / hr
In order to ensure a reliable supply of natural gas, large LNG
storage tanks are required in optimal locations. As of March
2018, KOGAS has 72 LNG storage tanks with an overall
storage capacity of 11.47 million ㎘. By 2029, a new LNG
No. of LNG Storage Tanks Pipeline in Operation (4,790km) Operation Management Center District Division

72
terminal with storage tanks will be constructed. Currently,
three more LNG storage tanks are under construction at New Pipeline under Construction Pressure Booster Branch Offices

the Incheon terminal. Construction of the Jeju LNG terminal Pressure Booster / New Pipeline Construction Office
Demand Increase /
began in 2017 and it will be operational by 2019. Pressure Booster / Demand Increase / Power Generation / Others
Power Generation
NEO Domestic Business EXCELLENT TRUST with KOGAS 2018 NEXT Energy, with KOGAS 24 | 25

Connecting All Regions KOGAS first supplied natural gas to the Pyeongtaek power plant Municipalities with Access to
Natural Gas Supply
Aiming for Nationwide Distribution
in 1986. As of 2017, it is supplying natural gas to 47 power plants
of South Korea
91%
KOGAS is aiming to expand the gas network to regions which
and 32 municipal gas companies. Every year, we have been
did not previously have access to a municipal gas service.
― expanding our operations, expanding the number of regions
As of 2011, on average 75 percent of the South Korean
and citizens who benefit from our operations.
Nationwide Circular Natural Gas population had access to a natural gas service. The access
(209 municipalities out of 229)
Pipeline Network rate was 87 percent for the Seoul Metropolitan Area and
60 percent in the rest of the country. This raised concerns
about small businesses and low-income households having
Main Pipeline Expansion Target
to rely on more expensive fuels. KOGAS invested 2.5 trillion

Total Length of Circular

Natural Gas Pipeline
Nationwide Transmission Facilities
The nine district divisions are responsible for relaying
5,305 km by 2023
KRW to enable the provision of a natural gas service to more
people, to help less-developed regions and to ensure energy
welfare. Work is under way to provide natural gas service in

4,790km
natural gas, which is supplied from the LNG terminals, at a
municipalities including Chuangyang and Jeju since 2008.
lower pressure suited to consumers. The circular pipeline
network is designed for bi-directional transmission in case of
Heating Value Based Natural Gas Pricing and Quality Assurance
emergencies caused by shut-down of terminals. Compared to
In the past, KOGAS has charged its customers by the volume
2017, the total length of the pipeline and the number of supply
of natural gas consumed in the past. However, it began to
stations has increased by 118km and 14, with expansion
charge by heating value since 1st July 2012. Charging by
to Gunsan Saemangeum area and the installation of new
heating value is part of KOGAS' response to the reduction
pipeline between Geumcheon and Cheongyang. As of early
in heating value per volume in natural gas resources in the
Regional Headquarters 2018, the main pipeline spans over 4,790km with 397 supply
market. It is important to maintain a steady supply of natural
stations in operation.
No. of Control Stations Natural Gas Service Expansion Plan gas in terms of total heating value in order to ensure efficient
operation of facilities and to charge customers fairly. KOGAS
Seoul District
Division
38 413km now posts a monthly natural gas supply forecast in total
heating value on its website. The forecast is calculated using
the projected amount of natural gas imports and stock. The four
Incheon District
Division 18 267km LNG terminals collaborate to supply natural gas within a one
percent margin of error in the heating value. A heating value
Gyeonggi District
Division 46 533km monitoring system has been incorporated in order to maintain
the heating value of natural gas at a steady level. KOGAS has
imposed a maximum two percent margin of error in heating
Gangwon District
Division 68 662km value at all supply stations. Quality checks including Wobbe
index, nitrogen, and CO2 content tests are all conducted in
Daejeon & Chungcheong
District Division
34 464km order to ensure high quality standards at all times.

Jeonbuk District
Division 31 462km
Gwangju & Jeonnam
District Division 47 575km
Daegu & Gyeongbuk
District Division 69 813km Regions added in 2016
Regions added in 2017

601km
Busan & Gyeongnam Regions to be added by 2021
District Division 46
NEO Domestic Business
Safety Is
Our Top Priority
―
Safety & Environmental Management
Safety Culture Score (ISRS-C)
7.4
Highest in Country at
Monthly Safety Inspection Day
4
th every month
EXCELLENT TRUST with KOGAS
Guided by its vision of becoming a sustainable energy
company, KOGAS plans for the future with a focus on both
short-term business performance and long-term value. We will
strive to make the world a better place by placing safety and
environmental management as our top priorities.
ISO 9 0 01 ISO 14 0 01 OHSAS 18 0 01 ISO 29 0 01
Safety First: from Production to Supply
From production to supply, KOGAS puts safety as the top
priority throughout its operations. In 1997, KOGAS implemented
a proprietary Environment, Health, Safety and Quality (EHSQ)
management system for integrated and efficient management.
The EHSQ system has been over time with ISO 9001, ISO
14001, OHSAS 18001 and ISO 29001 certifications.
Monthly Safety Inspection Day
The 4th day of every month is designated as Safety Check-up
Day, allowing all employees to conduct the necessary safety
checks. In addition, booklets containing safety incidents
and lessons learned are published and distributed to all
employees to raise awareness on safety management.
2018 NEXT Energy, with KOGAS 26 | 27
GHC Reduction Advanced System for 24-hour Safety Management
270,000
KOGAS has implemented an advanced integrated remote
monitoring system which keeps track of the volume, pressure
tons and risks of the nationwide pipeline network 24-hours a day
at the Central Control Center. We also operate a backup
monitoring center in order to keep track of the natural gas
pipeline operations and to quickly respond to accidents
caused by fire, earthquakes etc.
Saving on Carbon Emission
Credit Purchase
5.4
Corporate-wide Environmental Management System
All KOGAS operation sites have been certified with the ISO
50001 Energy Management System. Solar, wind and fuel cell
billion KRW
systems have been installed to provide some of the electricity
required at KOGAS operation sites. Solar and geothermal
systems are also used for heating and cooling. KOGAS is also
conducting activities for pollution prevention and mitigation,
stakeholder engagement and related legal activities as part of
Enterprise Resources Planning. Furthermore, environmental
management data is collected on a monthly basis and is
published through the national environmental information
disclosure system.
 KOGAS is building
its international
presence as a
distinguished global
energy company.

+ LNG Procurement
+ Exploration Projects
+ Development and Production Projects
+ LNG Projects
+ Infrastructure Projects

Expanding Global Operations with Outstanding Infrastructure + Overseas Business Overview

NEO EXCELLENT Global Provider TRUST with KOGAS 2018 NEXT Energy, with KOGAS 30 | 31

Supplying Natural Gas in KOGAS has secured a global network to ensure they are able to Exploring for a Sustainable Energy resources are an important asset for ensuring the
procure the natural gas needed: reliably and cost-effectively. KOGAS prosperity of today and of the future. KOGAS operates a
Reliable and Cost-effective is using the world's highest LNG purchasing capacity and market Energy Future number of overseas resource exploration projects to ensure a

Manner
information to make energy affordable to all. ― reliable supply of natural gas for the people and businesses of
South Korea, which heavily relies on overseas energy resources.
Resource Exploration Projects
― KOGAS will continue its energy resource exploration efforts

LNG Procurement overseas with a long-term perspective, prudence and sense of

responsibility.

Market-leading LNG Purchasing Capacity and Market Information

KOGAS has market-leading LNG purchasing capacity and market
information. This has allowed KOGAS to build win-win business
relationships and to build the necessary infrastructure with
many companies worldwide, securing an adequate quantity
of natural gas when needed. KOGAS has also developed a
demand forecast model; high-precision short, medium and
long-term forecasts, to help ensure a stable supply of natural
gas for municipalities and power plants in South Korea. KOGAS
has also implemented a range of measures to secure natural
gas in a flexible and efficient manner, that enables them to
respond to unexpected weather events such as extreme cold
or natural disasters. These include, cargo swaps-trading LNG
with overseas buyers, short-term contracts and spot purchases.
KOGAS has many long-term contracts up to 10 years, which
helps strengthen its relationship with sellers, and is currently
participating in 24 oil and gas projects in 13 countries. In 2017,
KOGAS imported approximately 33,000,000 tons of LNG from
16 countries. Marine Gas Field [#2, 3, 9] in Cyprus
In January 2013, KOGAS acquired a 20% share of marine gas
Major LNG Source Countries field No. 2, 3 and 9 in Cyprus for resource exploration and
2017 LNG Procurement

33
distribution. The project viability is currently being examined
Russia 1.8 million tons 6% through drilling of exploratory wells, until January 2019.

million tons
5%
Qatar 11.72 million tons
35% Marine Gas Field [E] in East Timor
In 2007, KOGAS purchased a 10% share of five marine gas
fields (A, B, C, E, H) in East Timor, owned by Eni, an Italian
Proportion of KOGAS's LNG Import USA 1.65 million tons Oman 4.2 million tons
4% oil and gas major. Currently, the feasibility of the gas fields is
in Global Market in 2017 being analyzed with drilling at one exploratory well.
10%

11.3% 4% etc. 1.4 million tons

Brunei 1.4 million tons

Malaysia 3.2 million tons

Indonesia 2.2 million tons

13% 7%
Marine Gas Field in Krueng Mane, Indonesia
In 2007, KOGAS purchased a 15% share of the marine gas
field in Krueng Mane, from Eni. This project was approved by

16% the Indonesian government in January 2012 and basic design

Australia 5.4 million tons for the development of the gas field has begun.
NEO EXCELLENT Global Provider TRUST with KOGAS
Striving to Secure Energy KOGAS is participating in overseas oil and gas development
and production businesses through various means including
Resources Worldwide equity investment and development right ownership in order to
― secure supply and generate profit.
Development & Production Projects
Akkas and Mansuriya Gas Fields in Iraq
KOGAS won the international bid for development held by the
Az Zubayr Project Capital Recovery Rate federal government of Iraq in October 2010. The development
101.6%
contract was signed in 2011. Production targets for Akkas and
Mansuriya gas fields are 2.1Tcf and 1.68Tcf respectively over
20 years between 2011 and 2030.
(As of Dec 2017)
Zubair and Badra Gas Fields in Iraq
KOGAS passed the pre-qualification process to participate in
Badra Oil & Gas Fields the bid organized by the Iraqi government in 2009. KOGAS
Oil & Gas Production Volume won the Zubair project in partnership with Eni, an Italian oil and
640
gas major, and the Badra project in partnership with Gazprom,
a Russian oil and gas major. KOGAS began to recover its
million barrels investment in the Zubair and Badra projects in 2011 and 2015
(over 20-year contract period) respectively.
Horn River/West Cutbank in Canada
In February 2010, KOGAS established KOGAS Canada Ltd. for
non-conventional natural gas resource development in Canada
and LNG procurement from North America. KOGAS Canada Ltd.
owns a 50% share of the Kiwigana gas field in the Horn River
and the Jackpine and Noel gas fields in West Cutbank, all of
which are currently in production.
Umiak Gas Field in the Canadian Arctic
KOGAS owns a permanent development license for the Umiak
gas field, which is located northwest of the town of Inuvik. KOGAS
has completed environmental impact monitoring and is currently
conducting a feasibility study for gas pipeline construction.
A-1/A-3 Gas Field in Myanmar
KOGAS owns an 8.5% ownership share of A-1/A-3 gas fields
offshore northwest of Myanmar, which has an estimated
reser ve of 4Tcf. Production began in July 2013 after
completion of production wells, platforms, and off/onshore
pipelines. Production level has been successfully stabilized
and daily production reached 500 MMscf in December 2014
for sales in China and Myanmar.
2018 NEXT Energy, with KOGAS 32 | 33
Surgil Gas Field in Uzbekistan
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.
Senoro Gas Field in Indonesia
KOGAS purchased a 9.8% share of the gas field in Senoro,
located in Sulawesi, Indonesia which is linked to the DSLNG
liquefaction plant project. LNG production has been stable
since it first began operation in June 2015.
Surgil Gas Field, Uzbekistan
Gas field development collaboration
Gas to petrochemical production/sales
Natural gas sales
Integrated resource development project
NEO EXCELLENT Global Provider TRUST with KOGAS 2018 NEXT Energy, with KOGAS 34 | 35

LNG-Canada Project in Canada DSLNG Project in Indonesia

The goal of the LNG-Canada project is to construct a
liquefaction plant in the western coastal area of Canada so
that LNG can be exported to South Korea and other Asian
countries. The Canadian government granted a license for 40
years of export operation to the project, of which KOGAS has
a 15% ownership share.
GLNG Project in Australia
KOGAS owns a 15% share of the GLNG project in Australia,
which began LNG production in September 2015. KOGAS was
one of the pioneers in developing coal seam gas in Australia.
Methane gas which is trapped in the coal seam, is then exported
after liquefaction at the LNG plant in Gladstone. KOGAS will
continue to build its capacity to utilize unconventional gas
resources.
Prelude Project in Australia
In March 2012, KOGAS acquired a 10% share of a consolidated
LNG project that aimed to develop small and mid-sized
gas fields, including Prelude located offshore northwest of
Australia, with a floating LNG facility (FLNG). This is the first
overseas FLNG project KOGAS decided to invest in and
commercial production is targeted for late 2018.
KOGAS acquired 14.975% ownership share in the DSLNG
project, which began LNG production in June 2015. It has
reached an annual production level of 2 million tons of LNG,
700,000 tons of which is supplied to South Korea.
Ras Laffan LNG Project in Qatar
In December 1999, KOGAS acquired a 5% share of the
Rasgas LNG project through KORAS, a joint venture set up
with private sector partners. The project, which currently has
an annual production volume of 6.6 million tons of LNG, is
expected to last until 2029.
OLNG Project in Oman
In January 1997, KOGAS invested in a 5% share of the
OLNG project through KOLNG, a joint venture founded with
a number of private companies. This plant is located 300km
southeast of Muscat, the capital of Oman and annual LNG
production has reached 7.2 million tons.
LNG Production Volume - KOGAS Share Only (unit: thousand tons)

Taking on Challenges KOGAS first participated in an LNG project as an equity investor in

788
1996 and has since built its capacity as an independent developer. YLNG Project in Yemen
to Achieve Energy
2015 2016 2017
684
KOGAS will continue to increase its project assessment capacity and In late 2005, KOGAS acquired 8.9% ownership share in
its ability to execute. the YLNG project, 6% as a direct overseas investment and
Independence 2.9% through a special purpose corporation. The project 357 378
― site is located on the east coast of Yemen and has an annual 251 250 267

LNG Projects production target of 6.7 million tons of LNG.

95 102 103 109
82

RasGas OLNG DSLNG GLNG

Mozambique Area 4 Gas Reserve Area 4 LNG Project in Mozambique

KOGAS confirmed the existence of natural gas resources in
Mamba, Coral and Agulha structures in the Area 4 marine
gas field and plans to develop them with a phased approach.
In June 2017, KOGAS made the final decision to develop
the Coral gas field, which has estimated reserves of 16Tcf,

85Tcf
with a floating LNG facility. The Mamba gas field, which has
estimated reserves of 51Tcf, will be developed with a land-
(1.92 billion tons) based LNG liquefaction plant. Both are now waiting for the
development plans to be approved and the final investment
decisions made.
NEO
We Will Become a World Leader
in Energy with Advanced
Technology Know-how
― the world.
Infrastructure Projects
Responsible for
10
percent of
natural supply in Mexico
(LNG Terminal Project for Investment
in Manzanillo, Mexico)
EXCELLENT Global Provider TRUST with KOGAS
KOGAS constructed its first LNG terminal in Pyeongtaek and has
since built three more LNG terminals in Incheon, Tongyeong and
Samcheok. Thanks to KOGAS' extensive experience, over three
decades, the company has successfully demonstrated its leadership
in the construction and operation of natural gas infrastructure all over
LNG Terminal Project in Manzanillo, Mexico
This project was commissioned by the Comision Federal
de Electricidad (CFE) to switch a coal 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 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.
CNG / Cylinder in Uzbekistan
In 2015, KOGAS formed a consortium with a number of other
South Korean companies and then formed a joint venture with
the Uzbekistan government for a CNG project for cylinder
production. Efforts continue, working to expand production.
LNG Terminal Technological
Support Projects in China
Education/Technological
Consultation Projects
Fujian (2008)
Jiangsu (2010)
Zhejiang (2012)
Qingdao / Tangshan (2013)
Tianjin (2017)
Test Operation Projects
Jiangsu (2010)
Dalian (2011)
Qingdao (2014)
Guangxi (2016)
Tank Designing
Jiangsu (2012)
LNG Terminal Technological
Support Projects in Other Regions
Technological Support Project
: Thailand PTT Terminal Project (2012)
Technological Consultation Project
: UAE LNG Terminal Technological
Consultation Project (2012)
Education/Training Project
: Malaysia LNG Terminal Education/
Training Project (Aug-Sept 2016)
2018 NEXT Energy, with KOGAS 36 | 37
CNG Charging Station in Uzbekistan
KOGAS formed a joint venture with Uzbekistan in 2010
for CNG business between 2011 and 2025. KOGAS began
operating four charging stations in 2016, all of which have
high utilization rates.
Gas Supply Project in Maputo, Mozambique
KOGAS won the contract for the Maputo municipal gas project
as a Build-Own-Operate-Transfer 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 between ENH, the national
gas corporation of Mozambique and KOGAS. ENH-KOGAS
successfully completed construction which included 62.2km
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
started natural gas service in June 2015. Currently, KOGAS
supplies natural gas to one power plant and 21 industrial
and commercial buyers using the gas pipeline spanning over
82km. KOGAS has been involved in a number of related
projects while continuing its efforts to develop new buyers.
LNG Terminal Project for Technology in Al-Zour Kuwait
In March 2016, KOGAS won the contract for construction of
the Al-Zour LNG import terminal with the Kuwait National
Petroleum Company. Designed with an annual LNG
processing capacity of 22 million tons, it will be equipped
with two berth facilities, eight storage tanks (225,000㎘ per
tank) and 14 secondary pumps. Construction started in May
2016 and is scheduled for completion in 2021. KOGAS has
begun training operation and maintenance staff, and running
test operation on the completed facilities.
LNG Terminal Technical Support Project in Singapore
In February 2010, KOGAS signed a technical support service
contract in partnership with Samsung C&T that won an EPC
contract for a new LNG terminal on Jurong Island, Singapore.
This was an especially important project for the Singapore's
energy security. The completed LNG terminal is equipped
with two 180,000㎘ LNG storage tanks, gasification and
transmission facilities which are capable of supplying 3.5
million tons of LNG per year. In December 2014, KOGAS won
the contract to design a 260,000㎘ storage tank for the third
expansion of the terminal.
NEO EXCELLENT Global Provider TRUST with KOGAS 2018 NEXT Energy, with KOGAS 38 | 39

Global Project 1
2

―
Overseas Project Status 3
2 3

4
5
1 6
7
1
2 3 1

8
4

2
2
6
Development & Production Projects (9)
9
① Umiak Gas Field in the Canadian Arctic
② Horn River / West Cutbank in Canada 3
5
③ Surgil Gas Field in Uzbekistan
④ Mansuriya Gas Field in Iraq 7
⑤ Akkas Gas Field in Iraq
⑥ Badra Gas Field in Iraq Resources Exploration Projects (3)
⑦ Zubair Gas Field in Iraq ① Marine Gas Field [#2, 3, 9] in Cyprus 8
⑧ A-1/A-3 Gas Field in Myanmar ② Marine Gas Field in Krueng Mane, Indonesia 4

⑨ Senoro Gas Field in Indonesia ③ Marine Gas Field [E] in East Timor

LNG Projects (8) Overseas LNG-related Technological Service Projects (2)

① LNG-Canada in Canada
② Ras Laffan LNG in Qatar
③ OLNG in Oman
④ YLNG in Yemen
⑤ Area 4 LNG in Mozambique
⑥ DSLNG in Indonesia
⑦ Prelude in Australia
⑧ GLNG in Australia
① LNG Terminal Project for Technology in Al-Zour Kuwait
② LNG Terminal Technical Support Project in Singapore
Infrastructure Projects (4)
① LNG Terminal Project in Manzanillo, Mexico
② Cylinder in Uzbekistan
③ CNG Charging Station in Uzbekistan
④ Gas Supply Project in Maputo, Mozambique
 KOGAS takes pride
in protecting people,
nature and industry
by providing clean
energy.

+ Introduction of KOGAS
Research Institute
+ Main Research Areas
+ Key R&D Achievements

Developed by KOGAS: Technologies for the Future You Can Depend On

NEO EXCELLENT TRUST R & D with KOGAS 2018 NEXT Energy, with KOGAS 42 | 43

Strengthening Technological R&D activities allow us to navigate an uncertain future. To
ensure prosperity in the future, KOGAS continues to strive to
Competitiveness of develop new technologies and to be a pioneer with its R&D
activities. KOGAS will continue to lead technology development
Energy Industry and overseas market expansion of natural gas industry by
― building on its experience with increased R&D investment.
― KOGAS Research Institute has been conducting a wide range
Main Research Areas of research, focused on the development of core technologies
in the following business areas; upstream (exploration,
development and production), midstream (LNG storage tanks
and the liquefaction process) and downstream (supply and
distribution of natural gas) business areas. It is also engaged

KOGAS Research Institute in promising future energy technologies including renewable

Natural Gas Supply & Safety
and alternative energies.
• Intelligent Pipeline Pigs
• Quality and Measurement of Gas
• Risk and Safety Inspection
KOGAS Research Institute Setting the Foundation for Tomorrow: KOGAS Research Institute
(Incheon) • Soundness of Method and Pipeline
Established in 1990, the KOGAS Research Institute quickly
became a leader in comprehensive energy research in South Natural Gas Exploration and
Korea. It covers R&D areas from natural gas exploration & Development
KOGAS Research Institute • Oil/Gas Field E&P
development to natural gas distribution. Everyone working
(Ansan)
at the Institute is dedicated to developing core technologies • Shale/Tight Gas E&P

and contributing to an even brighter future for South Korea's • Coal Bed Methane Development
Hydrogen fuel cells
energy industry.
No. of R&D Staff As of 2018, over 100 researchers are working on practical

105
Green Energy
technologies which are already in clear demand, with the
• Hydrogen Fuel Cell
aim of strengthening South Korea's energy security and
• LNG Bunkering
competitiveness in energy technology.
• Natural Gas Vehicles
The KOGAS research institute will continue to contribute
• Tri-generation System
as a technology leader, by focusing on clean energy in
• Synthetic Natural Gas (SNG)
R&D Expenditure particular hydrogen fuel cells, LNG bunkering for ships, LNG

59.1
Natural Gas Liquefaction • Biogas
depressurization and cooling energy utilization technologies
and Shipment • LNG Depressurization
and advanced natural gas utilization using 4th industrial
• Liquefaction Plant and Process Generator
billion KRW revolution technologies.
• LNG Carrier Containment (KC-1) • Dimethyl Ether
• Design for LNG Storage Tank • GTL
NEO EXCELLENT
Developing Proprietary
Technologies and Solutions
for the Global Market
― diagnosis.
Key R&D Achievements
Ⅰ. Natural Gas Exploration and Development
Making Energy Leadership a Reality: Oil & Gas E&P Technologies
Oil and gas E&P is a high-risk, high-capital, long-term investment.
The KOGAS Research Institute has participated in the exploration
stage of the Zubair Oil Field in Iraq and a large-scale gas field
in Mozambique. The Institute led on reserve and production
estimations through analysis of tests.
Leading on South Korea's Shale Gas and Tight Gas Development R&D
Shale gas and tight gas are found trapped within shale formations
and reservoir rocks. The KOGAS Resource Technology Research
Center (RTRC) successfully identified optimal shale gas development
locations at the River 3D site of the Montney shale reservoir, after
four years of research. Gas production began in February 2017 using
optimal horizontal drilling and hydraulic fracturing technologies.
Coalbed Methane R&D: Increasing Prominence of Unconventional Gas
Coalbed methane gas (CBM) resources are found between
500 to 1,000 meters below the surface, making them a low-
cost and low-risk resource. The KOGAS RTRC gained experience
in CBM development through the 1st stage demonstration
project in Indonesia. It has been building gas reserve analysis
and assessment capacity at the CBM production site in Australia
between 2016 and 2018, boosting productivity and recovery ratio.
TRUST R & D with KOGAS
KOGAS is committed to becoming a provider of natural gas
technologies and solutions not only for South Korea but for the
world. KOGAS is striving to develop proprietary technologies
and to make them available to the market.
Ⅱ. Natural Gas Supply & Safety
Intelligent Pipeline Inspection Gauge (PIG)
Intelligent PIGs are designed to move inside the natural gas
pipline to remove foreign matters and detect flaws, prevent
accidents and assess the lifespan of the pipelines. Developed
in-house by KOGAS, the Intelligent PIGs have been deployed
in 47 sections of natural gas pipeline, spanning over 2,529km,
in South Korea, and have led to cost savings of 20 billion KRW.
Perfecting Gas Quality and Quantity Measurement Technologies
With decades of operational experience, KOGAS has built its
capacity for quality and quantity measurement technologies
and has earned international certifications for its natural
gas flowmeter, gas content analysis, and measurement
device calibration. KOGAS has an excellent track record for
maintaining a high level of accuracy. KOGAS is expanding its
R&D areas in anticipation of importing Russian natural gas
through pipelines, to ensure compatibility and quality.
Ensuring Operation Safety: Risk Assessment and Safety Inspection
In 2013, KOGAS developed quantitative risk analysis and
safety inspection technique for accidents including fire and
explosion. The techniques have been applied at KOGAS'
production and supply infrastructures including LNG storage
2018 NEXT Energy, with KOGAS 44 | 45
Benefits of KC-1 Development
Cost Saving
tanks, underground pipelines and undersea pipelines.
We are also building a comprehensive safety management
system that enables quick and accurate decision-making in the
187.5 billion KRW
event of natural disasters such as earthquakes, using advanced
technologies including earthquake-resistant performance
Intelligent Pipeline Pigs
2,529 km
Ensuring Pipeline Soundness Over Entire Life Span
KOGAS has begun development of gas leak detection &
prediction technology that incorporates input from a GIS-
based underground pipeline information system and the
integrated pipeline network monitoring system (KOSPA) and
uses mathematical algorithm analysis techniques. In addition,
we are building technical standardization for the entire life
span of the pipeline which includes development of a subsea
pipeline network design program in 2017 and advanced
pipeline usability assessment and maintenance procedures
(2016).
Ⅲ. Natural Gas Liquefaction and Shipment
Quintessence of LNG Technology: KOGAS Single Mixed Refrigerant (KSMR)
Natural gas is turned into liquid at -162 degree Celsius. Natural
gas liquefaction has many economic benefits. In 2011, KOGAS
developed KOGAS Single Mixed Refrigerant (KSMR), a proprietary
technology which allows liquefaction through a single cycle
process using single refrigerant. KSMR is a promising technology
because it allows the liquefaction plant to be significantly smaller.
LNG Carrier Containment (KC-1)
LNG carrier containment is a special type of enclosure made with
a specific kind of stainless steel and insulation material engineered
to ensure the safe transport of LNG stored at -162 degree Celsius,
in a hostile maritime environment such as crashing waves and
gusting winds. In 2004, KOGAS began development of KC-1 in
collaboration with Daewoo S&ME, Samsung Heavy Industries
and Hyundai Heavy Industries to reduce costs. The project was
successfully completed after 10 years.
World Leader in LNG Storage Tanks
KOGAS has successfully developed the next-generation large
LNG storage tank with a capacity of 270,000㎘. The new
tanks have been built at the Samcheok LNG Terminal and for
the Singapore SLNG Expansion Project.
NEO EXCELLENT TRUST R & D with KOGAS
KOGAS Will Pioneer International Competition around the development of
sustainable energy sources and technologies are continually
New Frontiers intensifying with strengthening regulations on fossil fuel use and
progress in the 4th industrial revolution. KOGAS will continue to
respond to environmental issues in a preemptive manner and
pioneer new frontiers to ensure a brighter future.
Ⅳ. Green Energy
The Ultimate Energy: Hydrogen & Hydrogen Fuel Cells
Hydrogen offers many benefits including elimination of pollution,
ease of storage and ease of conversion into other forms of
energy. Using hydrogen produced from sources including
natural gas are receiving much public attention because fuel
cell technology allows production of heat and electricity as
well as power zero emission fuel cell electric vehicles. KOGAS
successfully commercialized a 5kW-class hydrogen production
device. It is also developing technologies for hydrogen chargers,
large scale hydrogen production, and hydrogen storage.
Improving Air Quality: LNG Bunkering
LNG bunkering refers to technologies that enable ships to run
on LNG, leading to significant reduction in air pollutants. In 2013,
the first ship in South Korea to run on LNG, the Econuri, was
commissioned and is currently in operation. KOGAS is developing
standardized LNG supply methods for ships using a vehicle-
based charging system and is participating in a public-private
partnership for LNG bunkering using KOGAS' infrastructure.
2017 CNG Bus Improvement
GHG Emission Reduction Realizing Environmental and Efficiency Benefits: Natural Gas Vehicles
30%
Using natural gas as a vehicle fuel has a number of benefits
including reduced emission of air pollutants and higher fuel
efficiency, which in turn leads to reduction in greenhouse gas
emissions. Demonstration projects on testing CNG buses,
DIESEL LNG cargo trucks and HCNG vehicles are in progress.
30% Technologies for Triple Benefits: Tri-generation System
A tri-generation system is a comprehensive energy system
which powers a compressor for cooling and a generator
simultaneously or independently using a gas engine. It has
potential to reduce peak electricity load as well as seasonal
CNG BUS fluctuations in natural gas demand. KOGAS plans to release a
prototype for building application before the end of 2018.
2018 NEXT Energy, with KOGAS 46 | 47
Coal to Gas: Synthetic Natural Gas
Synthetic natural gas (SNG) is produced by causing a reaction
between coal, steam and oxygen in a high temperature/high
pressure environment and then removing the impurities.
SNG produced using coal at the base material is a viable
replacement to the more expensive LNG. Also, research on
production of mixing the high heat content SNG with a lower
heat content natural gas is under progress in case of low
pressure PNG development.
Carbon Neutral Bio Gas
KOGAS is working on technologies for production of biogas using
organic waste and biomass. KOGAS has developed a 250Nm3/
h-class pressure swing adsorption (PSA) unit and tested it at the
Wonju Wastewater Treatment Plant for production of biogas for
vehicle use. The PSA unit was transported to the Chungju Bio
Energy Center which converts food waste to biogas. KOGAS is
currently researching methods for mixing the biogas produced
and transporting it through the municipal gas pipeline.
Electricity Generation Using Energy from Pressure Reduction
KOGAS is developing a new system capable of reducing gas
pressure and generating electricity by rotating a turbine with
the mechanical energy from the gas released during the
pressure reduction. The system will be capable of supplying
generated electricity for internal consumption or to the grid.
Next Generation Clean Fuel: Dimethyl Ether (DME)
DME can be synthesized using materials found in natural gas,
coalbed methane gas and biomass. It is expected to be a clean
alternative to LPG and diesel for automotive use. KOGAS has
successfully developed a new technology for producing DME
directly from natural gas and is currently reviewing plans for
demonstration at overseas sites and technology transfer.
Finding New Alternative to Oil: Gas to Liquid (GTL)
Gas to liquid technology enables the production of clean-burning
synthetic fuel through chemical processes, using natural gas.
The technology could be useful as oil stocks dwindle and oil
prices soar. KOGAS is committed to continue to invest in energy
conversion technologies to ensure a better energy future.
 Making the world
a better place with
better energy.
KOGAS will always
be there for you.

+ Shared Growth
+ Ethical Management
+ Job Creation Plan
+ KOGAS Taekwondo Team
+ CSR Activities

Supporting Dreams and Hopes

NEO EXCELLENT TRUST WITH KOGAS Social Contribution
Promoting There's an old African proverb that says 'If you want to go fast,
go alone but if you want to go far, go together.' KOGAS aims
Fairness to grow with SMEs and help them prosper. We are also striving
― to be a fair partner, to make both the journey and the outcome
great.
Shared Growth & Ethical Management
2017 Shared Growth Procurement Creating a Sound Business Ecosystem
(billion KRW) 'Achievement Sharing' is one of KOGAS' many programs for
supporting SMEs by selecting projects that meet common
1.32
interests and providing economic and technical support.
Products Made by We aim to achieve win-win cooperation by supporting our
People with Disabilities partners in all processes, from product development to sales
support. KOGAS also conducts various projects tailored
New Technology
Products 8.5 to enhance productivity and global competitiveness using
technologies developed by SMEs. Since July 2013, KOGAS
has supported the development of a natural gas regulator (6-
17.9
inch) in cooperation with SUNG IL-SIM and the Ministry of
Products Made SMEs & Startups, and successfully completed it in February
by Companies Founded by Women 2018. The success was a breakthrough in the natural gas
industry, reducing reliance on overseas suppliers. KOGAS
270.4
is making an active effort to cooperate with other SMEs to
SMEs replicate this success in technology development.
2018 NEXT Energy, with KOGAS 50 | 51
Win-win with Local Communities
KOGAS is engaged in support programs for local SMEs and their
2nd and 3rd tier suppliers, located in Daegu, which includes
production facility and technology development innovations and
productivity enhancement consulting. Since August 2017, we
have provided consulting to 11 companies in areas including on-
site technical processes, to reduce defect rates and production
costs. In addition, listening to SMEs and seeking solutions to
issues identified at production sites, KOGAS management has
periodically visited SMEs and held Meetings for Shared Growth.
KOGAS is also making an effort to foster a culture of shared
growth with initiatives including the Win-Win Management
Council, and the Win-Win Management Committee.
Clean and Transparent: Global Ethical Management
The 'Innovation Culture Department' was established in January
2016 to systematically promote ethical management and help
KOGAS fulfill its social responsibilities through transparency and
ethical management. The KOGAS Code of Ethics and the Code
of Conduct for Employees are routinely revised to reflect the
latest anti-corruption laws. KOGAS has strengthened the report
Ethical Management System Building Process system for paid lectures and conference participation by KOGAS
employees, and opened the Gift Returns Center. Employees
are required to receive on-line ethical management training and
call monitoring has been implemented to improve employee
etiquette. We have also organized a quiz game "Ethical Golden
Bell" that can elicit voluntary participation of employees rather
Ethical Management
than the traditional forced training sessions. The program
On-line Portal
received favorable feedback from participants.
Establishing an Ethical Management System Based on Participation
and Communication
In January 2017, KOGAS introduced 'Chung-Ah-Han', an ethical
management on-line portal with mileage program. This One-Stop
platform is designed to encourage active employee participation,
Participatory Ethical and encourages all employees to engage in innovative ethical
Management System management activities through features including CEO
messages, quarterly campaign events, and ethical conduct
discussion rooms. As an incentive system, the mileage system
keeps track of employee contributions including participation
in various integrity and ethical management activities and they
can accumulate bonus points for various perks and benefits. In
2018, KOGAS will strive to create an organizational culture where
Ethical Management
integrity is recognized as a top priority by reforming outdated
Promotion Incentive System
practices and promoting ethical conduct in all areas.
NEO
Creating Sustainable
High-Quality Jobs
― environment for people working with KOGAS.
Employment Plan
High Quality Jobs by 2025
18,000
Jobs on an Annual Basis
No. of Private Sector Jobs
Supported (as of 2017)
20,583 people
EXCELLENT TRUST WITH KOGAS Social Contribution 2018 NEXT Energy, with KOGAS 52 | 53
KOGAS strives to make the world a better place for all. KOGAS Demonstrating Established in July 1997, KOGAS Taekwondo Team is well
will continue to provide support to create high quality jobs recognized in the world for its great performance at various
for a greater number of people while improving the work the Power of competitions such as the World Championships, Asian Games
Taekwondo
and Olympic Games. KOGAS will continue to promote
Taekwondo, the national martial art of South Korea, to people
― all around the world.
KOGAS Taekwondo Team
Creating Jobs with New Businesses
KOGAS is creating many new jobs through its projects such as
construction of Samcheok, Incheon, Jeju LNG Terminals and
the main pipeline. KOGAS is also recruiting more R&D staff in
preparation for the 4th industrial revolution. New jobs are also
being created with new businesses such as hydrogen fuel cell
infrastructure and KC-1 development projects. KOGAS is also
providing lots of new work for the shipbuilding industry with LNG
carrier projects. In 2017, six new LNG carriers were completed,
alongside on-going repair work of existing ships, making a positive
impact on all of South Korea's shipbuilding industries.
Creating Win-win Jobs
KOGAS' job creation plan is implemented in the spirit of 'win-win'
with a focus on SME support, overseas project collaboration and
local economy support. KOGAS' SME support programs include
"Tomorrow credit union" program for employment support,
R&D collaboration projects for capacity building and overseas
market development support. In addition, we are creating
new opportunities for South Korean and local workers through
collaboration with private companies in projects including Surgil
Gas Field Development in Uzbekistan, Maputo Gas Supply
Project in Mozambique and LNG Terminal Project in Manzanillo,
Mexico. Lastly, we are creating new jobs for local communities
through energy welfare projects, homeless employment
support, social contribution buses and toy library programs. We
are also cooperating with Daegu City, where our headquarters is
located, to promote projects for local communities.
Improving the Work Environment
KOGAS is working hard to create high-quality jobs. First, it
plans to hire the staff responsible for safety related work
under a permanent contract, switching from outsourcing.
At the same time, functions fit for external experts will be
outsourced to private sector companies. KOGAS is also
supporting job creation in the private sector by operating four
LCNG stations and supporting in-house ventures. We plan to
make a sustained effort to create high quality jobs.
NEO EXCELLENT
Benefiting the Whole World
with "Onnuri Project"
― bring warmth to the world".
Social Contribution Activities
권 Corps are supporting one-to-one partnerships with local
TRUST WITH KOGAS Social Contribution 2018 NEXT Energy, with KOGAS 54 | 55
KOGAS is carrying out various CSR activities under the social
contribution brand 'Onnuri'. In Korean, "On" means "warmth"
and "Nuri" means "the whole world", together it means "Let's
KOGAS Volunteer
Heating and Wall Insulation Support Energy Welfare for the Underprivileged: the Onnuri Love Project
(between 2010 and 2017) KOGAS has reduced gas rates for households receiving social
832
welfare benefits and social welfare centers. Moreover, KOGAS
granted a grace period on payment for underprivileged
Low-income Families households which have failed to make a payment during the
707
winter instead of discontinuing their natural gas supply.
Improving Relationships with Local and the International
Social-welfare Facilities
Communities: Onnuri Partnership Project
KOGAS employees organized the Onnuri Volunteer Corps which
conducts a diverse range of projects. Each operation site is
providing tailored support for the projects. KOGAS has been
especially active in Daegu, supporting activities such as the
Social Contribution Mileage per establishment of eight children’s toy libraries, Kimchi sharing, and
Employee (Point)
medical support for children with severe illness at the Kyungpook
National University Children's Hospital. KOGAS is also supporting
39.13
64.51 local communities where resource development projects are on-
going. We supported the construction of an Elementary School
near Mozambique and provided learning materials to support the
2015 42.89 2017 school. In 2016, KOGAS began operating technical training courses
to help local residents become pipeline welders and mechanics.
2016
Fostering Future Generation and Promotes Public Interest: Onnuri
Hope Project
KOGAS has provided assistant devices for disabled children
Average volunteer activities hours per nationwide to help with their physical rehabilitation through the
employee in 2017: 32 hours
‘KOGAS Medical Support Project’. The Onnuri R-BANK program,
(2 mileages per 1 hour)
which began in 2010, providing free medical services for children
Employee Book Donation 2017 by dispatching medical staff to where they live. KOGAS has also
provided scholarships to high school and college students in need.
1,193
Total of
Promoting a Culture of Sharing Among Employees: Onnuri Unity Project
books KOGAS operates a 'matching grant' scheme, with funds
raised by employees. In addition, regional Onnuri Volunteer
welfare facilities to directly support them. In 2017, KOGAS
employees actively participated in sharing activities including
donating 1,193 books to six social welfare facilities.
 2018 NEXT Energy, with KOGAS 56 | 57

KOGAS Financial Results

Finacial Statement Key Financial Ratio (Under IFRS Consolidated Standards)

(Unit: Mil. in KRW)

Item Consolidated Separate Division 2017 2016 2015

35th Term 34th Term 35th Term 34th Term Debt Ratio (%) 356.2 322.7 320.7
Ⅰ. Current asset 7,582,190 8,658,041 6,797,610 7,573,599 Current Ratio (%) 115.1 155.8 175.4
Ⅱ. Non-Current Asset 29,557,249 31,383,962 28,532,414 30,171,449 Return on Equity (ROE) (%) -14.0 -6.3 3.0

(Total Asset) 37,139,439 40,042,003 35,330,024 37,745,048 Return on Assets (ROA) (%) -3.1 -1.5 0.7

Ⅰ. Current Liabilities 6,590,430 5,556,281 6,322,226 5,188,550 Operating Profit to Sales Ratio (%) 4.7 4.7 3.7
Net Debt Ratio = Net Debt/Total Capital, Total Capital = Net Debt + Capital
Ⅱ. Non-Current Liabilities 22,408,595 25,012,697 22,048,437 24,630,569

(Total Liabilities) 28,999,025 30,568,978 28,370,663 29,819,119

Ⅰ. Paid-In Capital 1,765,113 1,765,113 1,765,113 1,765,113 Shareholding

※ as of Dec 31, 2017
Ⅱ. Earned Surplus 4,601,193 5,811,332 4,050,034 5,075,985
Division Number of Shares Shareholding Rate (%)
Ⅲ. Hybrid Bond 308,157 308,157 308,157 308,157
Government 24,144,353 26.15
Ⅳ. Other Components of Capital 1,138,876 1,475,677 836,057 776,674 - Ministry of Strategy & Finance 20,758,110 22.49
Ⅴ. Non-Controlling Interest 327,075 112,746 - - - Ministry of Trade, Industry & Energy 3,386,243 3.67

(Total Capital) 8,140,414 9,473,025 6,959,361 7,925,929 KEPCO 18,900,000 20.47

(Total Liabilities and Capital) 37,139,439 40,042,003 35,330,024 37,745,048 Municipalities 7,321,122 7.93
National Pension Fund 7,462,007 8.08
ESOA 3,886,835 4.21
Foreign Investors 8,953,752 9.70
Private Investors 21,644,931 23.45
Statement of Comprehensive Income
(Unit: Mil. in KRW)
Total 92,313,000 100.00
Item Consolidated Separate * Due to the issuance of hybrid bonds (on Aug 22, 2014) that are convertible with treasury stocks, the treasury stocks are now deposited at Korea Securities Depository
35th Term 34th Term 35th Term 34th Term
Ⅰ. Income (Sales Revenue) 22,172,305 21,108,116 21,055,676 20,177,352

Ⅱ. Cost of Sales 20,729,039 19,694,151 19,803,030 18,847,532 Shares

※ Based on Closing Price
Ⅲ. Gross Profit (Loss) 1,443,266 1,413,965 1,252,646 1,329,820
Division 2017 2016 2015
Ⅳ. Selling and Administrative Expenses 409,329 415,751 350,700 374,409 Highest Share Price (KRW) 53,700 49,300 52,000
Ⅴ. Operating Profit 1,033,937 998,214 901,946 955,411 Lowest Share Price (KRW) 40,600 31,450 35,500
Ⅵ. Other Income 6,602 4,015 11,198 8,640 Outstanding Shares 92,313,000 92,313,000 92,313,000
Ⅶ. Other Expenses 30,946 18,509 47,936 36,180 Foreign Shareholding (%) 9.70 11.81 11.47

Ⅷ. Other Profit (Loss) △1,699,968 △1,071,199 △1,522,165 △923,153

Ⅸ. Financial Income 882,959 753,939 1,709,095 845,692

Ⅹ. Financial Cost 1,592,196 1,550,012 1,687,676 1,648,586 Dividends & Intrinsic Value
※ Under Separate Standards
XI. Gain on Valuation of Equity Method Securities 149,376 114,518 △61,920 17,328
Division 2017 2016 2015
XII. Income Tax △58,501 △156,556 324,153 11,981
Dividend Per Share (KRW) - - 170
XIII. Net Profit (Loss) △1,191,735 △612,478 △1,021,611 △792,829
Earnings Per Share (KRW) -11,708 -9,095 278
XIV. Other Comprehensive Profits/Losses △352,974 △87,083 59,475 △123,204 Highest PER (Times) - - 187.0
XV. Total Comprehensive Profits/Losses △1,544,709 △699,561 △962,136 △916,033 Lowest PER (Times) - - 127.6
KOGAS Overview and Organizational Chart

Overview of KOGAS Organizational Chart

Corporate Auditor
President
& CEO Office of the Auditor
Year of
Establishment

Overseas 1983 Facilities

Office of Public Relations Secretariat
Credit Grade Storage Facilities
72units 1,147㎘
Aa2 AA- AA-
(Moody’s) (S&P) (Fitch) Total Pipeline Sr. Executive Vice President of Sr. Executive Vice President of
Management Safety Technology
4,790km

Department of EHSQ
Management Cooperation Integrated Security
Total Assets Dept. Dept.
Overseas Projects Department of Central System
Control Office of Security &
KRW Emergency
24 Projects in
13 Countries 37.1394 tril.
Management Support Overseas Business Corporate Strategy Technology Business
Marketing Division LNG Terminal Division Trunk Line Division
Division Division Planning Division Division
Management Support Overseas Business Corporate Strategy Terminal Operation Trunk Line Operation Technology Planning &
Marketing Dept.
Dept. Dept. Division Dept. Dept. Development Dept.
Human Resources LNG Procurement Innovation Terminal construction Trunk Line Construction
Major LNG Sales Revenue Dept. Dept.
E&P Project Dept.
Management Dept. Dept. Dept.
New Business Dept.
Source Country Research Institute of Pyeongtaek Terminal Overseas Infra
Finance Dept. LNG Business Dept. Seoul District Division
Economics & Management Division Business Dept.
Qatar, Australia, KRW Incheon Terminal Incheon District Resource Technology
Oman, Malaysia,
Indonesia, Russia 22.1723 tril. Division
Tongyeong Terminal
Division
Gyeonggi District
Dept.
KOGAS Research
etc. Division division Institute
Samcheok Terminal Gangwon District
Division Division
LNG Sales LNG Procurement Daejeon · Chungcheong
District Division

32.16 million tons 33 million tons Jeonbuk District

Division
Gwangju · Jeonnam
District Division
Daegu · Gyeongbuk
District Division
Busan · Gyeongnam
District Division

Published by Seung-Il Jung | KOGAS

Employees Address 20, Cheomdan-ro, Dong-gu, Daegu, Korea
(As of Mar 31, 2018 / Person)
(1141, ShinSeoDong)
General Position R&D Other
Division Executives Total TEL (+82)53-670-0114
Grade 1 Grade 2 Grade 3 Grade 4~7 Position Position
Website www.KOGAS.or.kr
Total 7 52 221 672 2,415 126 246 3,739