POSCO, South Korea’s biggest steelmaker, said Thursday that it has established a subsidiary to operate a clean energy business it picked as one of its future growth engines.

The subsidiary, named POSCO Green Gas Technology Co., will produce synthetic natural gas, a fuel gas that can be produced from fossil fuels such as lignite coal or from biofuel, the company said.

SNG has the same components as liquefied natural gas, but its production cost is lower than that of LNG, the company said.

POSCO Green Gas Technology plans to complete the construction of the plant with an annual production capacity of 500,000 tons in August and start operating from January next year.

When put into operation, the plant will have an import substitution effect for LNG worth 200 billion won ($189 million) a year, the company said. (Yonhap)