Daewoo International Corp. said Sunday it has begun infrastructure work for a gas project in Myanmar after completing drilling and production tests.

The Korean resources developer will establish seabed platforms, onshore terminals and pipelines at two offshore fields in the Southeast Asian country in collaboration with Hyundai Heavy Industries Co., aiming to begin production in May 2013.

“The project will generate 300 billion won ($254.4 million) to 400 billion won in annual profit for 20 years starting 2014 when output reaches a maximum,” chief executive Lee Dong-hee said in a statement.

“That would completely alter the company’s revenue and operation models and make us an energy-specialized trading house that represents Korea.”

Daewoo, a POSCO subsidiary, embarked on the $4.7 billion project nearly a decade ago as it sought fresh income sources and to ride the wave of resources exploration among local trading firms. It also helps the steelmaker with shipping and raw material supplies.

Daewoo owns a 60 percent share in the project. Other partners are India’s state-run Oil & National Gas Corp. with a 20 percent stake, Gas Authority of India Ltd. and Korea Gas Corp., both with 10 percent each.

The three reserves in the A-1 and A-3 blocks are estimated to collectively hold 4.5 trillion cubic meters of natural gas, sufficient for Korea’s needs for five years. Mirae Asset Securities Co. values the reserves at 2 trillion won.

“We consider Daewoo’s competitiveness in revenue growth, overseas networks and project planning top among local traders,” Kwon Hae-soon, the brokerage’s analyst, said in a report.

“The project will serve as a powerful engine to boost its corporate value especially when gas sales get reflected in the company’s earnings starting 2013.”

Daewoo has also agreed to participate in a government project to extract gas from the continental shelf in the East Sea with STX Energy Co. and the Korea National Oil Corp., as Korea pushes to stabilize energy supplies and hedge against price swings.

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