MHI has received an order from POSCO, Korea's largest steel company, to provide core equipment for a gas turbine combined-cycle (GTCC) power plant which will use by-product gas from furnaces at the company's Pohang Works, a FINEX process plant which produces steel through the direct reduction method. POSCO aims to effectively use the low-calorie by-product gas (FINEX gas) from the furnace to meet part of the Pohong Works' electricity needs. The power plant is scheduled to go on-stream in February 2007.

The 146 MW plant will incorporate an M501S (DA) gas turbine, a gas compressor, a steam turbine, a heat recovery steam generator (HRSG) and a generator. MHI will be responsible for the design and manufacture of the gas turbine, gas compressor and steam turbine, which constitute the plant's core equipment. Mitsubishi Electric Corporation will supply the generator, while the HRSG and BOP (balance of plant: other peripheral equipment) will be procured by POSCO Engineering & Construction Co., Ltd.

POSCO is one of the world's largest steel companies, producing more than 30 million tons of crude steel in 2004. The company was established in 1968 as a state-owned operation and privatized in September 2000 as Pohang Iron and Steel, Co., Ltd. It produces a wide array of iron and steel products, including hot-rolled steel (roughly half of total sales), cold-rolled steel and stainless steel. FINEX is a new system incorporating a direct reduction furnace. It speeds up the complex iron-making process by making molten iron directly from iron ore (without sintering), eliminating the need for coal-coking. The method is therefore much faster than the conventional blast furnace method. POSCO is the first steel company in the world to adopt the FINEX system.

Because FINEX gas has a lower calorific heating value than natural gas - only about one-seventh in BTU (British thermal unit) parameters - stable combustion of FINEX gas-fired heat turbines requires advanced technology. MHI pioneered the development of BFG (blast furnace gas) GTCC technology in the 1980s and has already delivered many gas turbines to iron and steel companies both in Japan and overseas. This advanced technology and distinguished track record, together with a high evaluation of the outstanding reliability, efficiency and economy of MHI equipment, were significant factors in MHI's winning of the new order from POSCO.

With GTCC power generation, gas and steam turbines are used in combination to generate electricity in two stages, through the use of high-temperature exhaust heat from the gas turbine to drive the steam turbine. This configuration enables GTCC power plants to achieve higher thermal efficiency than non-GTCC plants. such as conventional boiler-steam turbine plants. Higher efficiency means GTCC plants can reduce fuel consumption relative to electricity output. Therefore they emit less CO2, making them more environmentally friendly.

As global demand for steel continues to expand concurrent with the rapid economic rise of nations such as China and India, steel companies are consistently operating at full capacity. Since last year, MHI has received a succession of orders from China for BFG-fired GTCC power generation systems. Companies placing orders with MHI include the following: Angang Group International Trade Corporation, Jiangsu Shagang Group Company, Maanshan Iron & Steel Company Ltd. and Handan Iron & Steel Company, Ltd. On the strength of this robust momentum, MHI intends to further expand its GTCC plant marketing activities targeting iron and steel company worldwide.