SK Innovation E&S launches full-scale natural gas production in Australia, begins LNG shipments

SK Innovation E&S has begun full-scale natural gas production at the Barossa gas field in Australia and successfully completed loading its first liquefied natural gas (LNG) shipment. This marks the fruition of 14 years of overseas resource development efforts since the company joined the project in 2012.
On the 27th, SK Innovation E&S announced that natural gas produced from the Barossa gas field in Australia has been transported to the Darwin LNG Terminal, where the first LNG shipment has now been loaded. The Barossa gas field is located offshore, about 300 kilometers off the northwest coast of Australia. Holding a 37.5% stake, SK Innovation E&S has acted as a key project partner alongside Santos with a 50% stake and JERA with 12.5%. Together they have invested a total of 1.6 billion dollars (about 2 trillion won) in reservoir assessment, permitting, and the construction of offshore and onshore facilities. It is the first case in which a Korean private company has participated from the early stages of overseas resource development through to successfully completing LNG production.


With the start of production, SK Innovation E&S will secure 1.3 million tons of LNG annually for the next 20 years. This volume is equivalent to about 3% of South Korea’s total annual LNG imports. Given the volatility of the global energy market driven by geopolitical risks such as international conflicts, the project is expected to help strengthen the country’s energy security. For SK Innovation E&S, the stable procurement of a large energy source is seen as further solidifying its business foundation to cope with uncertainty in the global energy market.
In particular, the project significantly reduced capital expenditure by adopting a brownfield approach, refurbishing and reusing facilities at the nearby Darwin LNG Terminal instead of building a new LNG terminal. By sourcing gas from Australia, which is geographically closer than the Middle East or the United States, the company has also lowered transportation costs, thereby enhancing price competitiveness.
Lee Jong-soo, president of SK Innovation E&S, said, "The first LNG production from the Barossa gas field is the result of a private company taking on the high-risk resource development sector with a long-term perspective over several decades." He added, "We expect this project to play a key role in strengthening South Korea’s resource security through stable energy supply, while also reinforcing the business foundation of SK Innovation E&S."
solidkjy@fnnews.com Reporter Gu Ja-yoon Reporter