HD Hyundai E&F, a wholly owned district energy subsidiary of HD Hyundai Oilbank, has reportedly completed construction of a liquefied natural gas (LNG) cogeneration facility at the Daesan Industrial Complex in Seosan, South Chungcheong Province, and began commercial operation in August 2026.
HD Hyundai E&F, established in 2021 as HD Hyundai Oilbank’s district energy specialist subsidiary, has reportedly been pursuing a business of directly supplying electricity and steam to 14 tenant companies at the Daesan complex, including HD Hyundai Chemical, KCC and Kolon Industries, through this cogeneration facility. The facility reportedly received completion certification from the Ministry of Climate, Energy and Environment on July 31,2026, and began commercial operation in August. Tenant companies at the Daesan complex had previously relied on grid electricity from the Korea Electric Power Corporation (KEPCO) and individual boilers, and this cogeneration facility now shifts them to an integrated electricity and steam supply system within the complex, it is reported. The original report
does not specify the gas turbine manufacturer or the engineering, procurement and construction (EPC) contractor.
The generation facility reportedly consists of a 277MW-class gas turbine and a 23MW-class steam turbine, forming an LNG cogeneration system. With this facility now operating, the annual electricity cost savings for the entire Daesan complex are projected at approximately KRW 15 billion to 17 billion, and participating companies are expected to see their electricitybills reduced by 6% to 10%, it is reported. The specific total investment amount has not been disclosed
This project is an example of a refiner directly building heat and power supply infrastructure within an industrial complex as a new business, reflecting a trend in which refining companies are expanding into power generation and energy services in response to volatility in refining margins, it is reported. The fact that Korea’s four major refiners are seeking new business opportunities to reduce their long-term dependence on the refining business, despite improved second-quarter earnings, is also cited as background for this project, according to the report.
Implications for Korea’s Industry
As the electricity cost burden on tenant companies at the Daesan complex eases, this is expected to contribute to improving the cost competitiveness of Korea’s petrochemical complexes, it is reported.
The actual electricity cost savings realized by individual tenant companies following commercial operation, and whether HD Hyundai Oilbank expands a similar district energy business model to other industrial complexes, are cited as points to watch, it is reported.