STX Energy plans to establish a power plant complex in the country’s east to reinforce its renewable energy business and related equipment manufacturing.
The Korean energy provider said it struck an agreement with the government of Samcheok, Gangwon Province, for the project estimated at 8 trillion won ($6.9 billion).

Under the deal, STX will build power generators focusing on renewable resources and marine bioenergy. It also plans to install production lines for related equipment.

The company aims to secure a capacity of 2,000 megawatts for the envisioned facilities by 2020 and double it later, a company spokesperson said, adding that it will soon begin the site selection process.

STX Energy is gearing up to be listed on the local stock market this year amid recent rumors of group-wide financial difficulty. The initial public offering will help fund the mega program, the company said.

“The project reflects the company’s vision to incorporate our manufacturing abilities in areas ranging from machinery to shipping to engineering with the clean energy business, which is one of our growth engines,” STX said in a statement.

The Seoul-based company expects that the project will bring about 3.6 trillion won in economic effects, create 2 million jobs and help boost the coastal city’s population by some 5,000.

STX has been actively engaged in resources development in the country’s eastern shore in recent years. It is participating in a project to extract gas from the continental shelf in the East Sea with Daewoo International and the Korea National Oil Corp. in a bid to stabilize energy supplies and hedge against price swings.

By Shin Hyon-hee (heeshin@heraldcorp.com)