In the energy business, LGI aims to establish a business portfolio ranging from energy production to sales, so as to stabilize the supply and distribution of energy essential for various industries.
LGI are participating in projects to develop overseas oil fields and gas fields.
In 1997, we participated in the development of gas fields in Bukha, Oman. From this, we are currently producing about 1,000 barrels of condensate per day, and 650 barrels of LPG per day. In November 2006, in another structure of West Bukha within the same block, we discovered new oil fields which enable us to produce 12,000 barrels of petroleum per day, and 500 tons of natural gas. We are developing these oil fields with the target of beginning production in 2008.
gas. We are currently continuing exploratory drilling for full-scale production. We will continue exploratory drilling with a view to securing additional gas deposits.
In 1999, seven domestic companies, including LGI, jointly participated in the RasLaffan LNG project in Qatar. From this operation, we are earning a dividend profit higher than expected thanks to high oil prices and increased sales. We expect to stably profit from this operation by 2023.
We vigorously ventured into oil field exploration projects in Central Asia, known as the second Middle East. In Kazakhstan, we participated in exploration projects for the landside ADA block in 2005, and the eighth block and the Egizkara block in 2006. We are now joint operator of those blocks. These projects expect to produce a total of hundreds of millions of barrels of oil deposits. As such, if they are successful, they will become a milestone in our history of developing resources.
In addition, we are participating in the Zhambyl offshore block development project in Kazakhstan, and the Australia-East Timor JPDA exploration project. We are currently awaiting a tangible result from these projects.
In the coal business, in the 1980s, we invested in the Ensham mine in Australia, and the Erel mine in Russia, among other coal mines, and concluded sales agreements with our partners. This has led the growth of our coal business. Currently we are importing bituminous coal from Australia, Russia, China and Indonesia to supply to KEPCO, POSCO and other major domestic clients. We also expanded coal exports into Japan, Taiwan and other nations, consolidating our position as Korea’s largest coal trader.
In 2007, we signed a MOU on the South Yakutia Comprehensive Development Project with the Republic of Sakha, with which we have developed strong ties through our investment in the existing Russian Erel mine. This has enabled us to secure strategic partnerships in resources development in Russia. This deal has offered us a momentum to establish overall cooperative ties with regard to the development of bituminous coal mines, iron ore mines, uranium mines, and diamond mines.
Meanwhile, we are conducting the businesses of pulp/paper, petroleum products, agricultural products, and medical supplies.
In the petroleum business, we conduct the bunkering business to supply fuel oil to ships that make calls in ports at home and overseas, as well as export petroleum products such as naphtha. We import and conduct a first-step refinement of crude oil to export to China, Japan and other nations. We import naphtha from the Middle East to export to Japan and other nations.
In the pulp/paper business, we supply pulp to domestic paper manufacturers, and import paper.
In the agricultural product business, we import the major raw material wheat gluten, for feed, to supply to domestic clients, and carry out trilateral exports. This has enabled us to consolidate our position as Korea’s major supplier of grains and raw materials for feed.
In the medical supplies business, we participate in project bids offered by governments of Middle Eastern and African nations, and carry out an export and third-to-third country trade of finished drugs and active medical ingredients in other regions.