KOGAS'Innovative
Approach

Professional manager-turned CEO Lee spearheads the innovations

Korea Gas Corp. has been aggressively accelerating its efforts to innovate its operation in a bid to cope with an era of unlimited global competition. As part of steps to go innovative, KOGAS has virtually become the first Korean public corporation to introduce a team system and has built up an autonomous, responsible management system.
In particular, an improvement in organizational productivity through in-house management innovations has led to a drop in raw material import unit prices, which have contributed to stabilizing city gas charges ― general prices.
Spearheading this innovative approach within KOGAS is Lee Soo-ho, who took office as the first professional manager-turned Chief Executive Officer in history of KOGAS. Lee, former vice chairman of LG International, took the helm of the state-run corporation in December 2005.
KOGAS has constantly been carrying out institutional reforms. KOGAS CEO Lee has been committed himself to shifting organizational structure from a position-oriented one to a job-oriented one.
In February 2005, KOGAS introduced a team system, virtually becoming the first such public corporation, slimmed its organizational structure and carried out a reshuffle favoring excellent manpower. Its decision-making process has reduced from a five-stage one to a three-state one: team head-division chief-CEO. Besides, KOGAS has established a system to eradicate loopholes in CEO's independent decision-making process: set up the in-house management committee and delegated more decision-making authorities to division and team heads. Each division chief has signed a management contract with each team to offer the motivation for achieving performance targets.
RESOURCES EXPLORATION. KOGAS has been making more strenuous efforts than ever to secure natural resources. The reason is that KOGAS has less leverage as the global natural gas industry has swiftly changed from a buyer's market to a seller's market. As part of the efforts to tackle these changes, KOGAS President Lee has visited such natural gas producing countries as Malaysia, Australia, Qatar and Oman and secured additional supplies. The Korean state-run gas import monopoly is also concentrating on securing and exploring energy resources through acquiring stakes and exploration projects. KOGAS is now participating in drilling and development projects in such areas as Blocks A-1 and A-3 in Myanmar, blocks in Western Kamchatka, and Block Uzunkui and Surgil gas field in Uzebekistan.
In the latest development, KOGAS President Lee signed agreements on the exploration of the Surgil gas field with his Uzbek counterpart from state-run Uzebkneftegaz in Grand InterContinental Hotel in Seoul on Feb. 28. Under the agreements, a 50:50 joint-venture will be established to secure economic opportunities in upcoming April when an Uzbek presidential decree takes into effect. The agreements call for exploration, development, and production of the Surgil gas field with 84 million tons of LNG equivalent natural gas reserves as well as construction and operation of a chemical plant.
KOGAS is contemplating a long-term natural gas import plan designed to secure a stable supply of natural gas by 2020. Korea's natural gas demand, standing at 24.84 million tons in 2006, is projected to grow to 40.35 million tons in 2020, representing an annual average rate of 3.5 percent. The cost for securing the additional demand is estimated at 8.28 trillion won. The state-run gas corporation plans to implement a project on a mid- and long-term contract on importing the demand for a decade later in consideration of energy security.
KOGAS was established in 1983 as a government investment corporation designed to secure a stable liquefied natural gas (LNG) imports.
KOGAS has so far imported LNG from abroad and wholesaled it while having built up a nationwide gas distribution network covering Gyeongsang, Jeolla and Gangwon provinces. Since its founding, KOGAS has now grown to become the world's largest LNG importer. As the nation's sole LNG provider, KOGAS is fully committed to providing clean, safe, and convenient energy to its people. nw

KOGAS CEO Lee Soo-ho