Korea Electric Power Corp. said Wednesday it has clinched a gas plant development deal with an Indonesian firm as part of its overseas business expansion to secure energy at cheaper costs.

The state-run electricity provider signed a joint development agreement with Indonesia‘s coal company Moa Maju Kurnia Utama and Essential Strategic Group Ltd., an investment arm of major heavy equipment maker PT Trakindo, according to KEPCO.

The deal includes the construction and running of a synthetic natural gas (SNG) plant that will produce an annual 1.1 million tons of the energy source, it said.

SNG is a type of fuel gas that can be extracted from fossil fuels, coal and oil shale.

The Korean energy company expects some 3 trillion won ($2.84 billion) to be spent for the whole project, it added.

KEPCO said it plans to sell the extracted gas from the South Asian country on home soil from 2020, while seeking to pursue similar overseas projects in Vietnam and Thailand. (Yonhap)