SK Gas to Grow Through Phased Operation of Ulsan AI Data Center Next Year

[Financial News] SK Gas is positioning the operation of its Ulsan AI Data Center (AIDC) as a new growth driver. The company has strengthened its core liquefied petroleum gas (LPG) business with power generation and liquefied natural gas (LNG) infrastructure. Starting in 2027, the phased operation of the Ulsan AIDC is expected to boost regional demand for electricity and LNG.
On the 10th, Son Hyun-jung, a researcher at Yuanta Securities Korea, maintained a “Buy” rating on SK Gas and raised the target price by 40% from the previous level to KRW 340,000.
She identified the expected increase in electricity and LNG demand from the operation of the Ulsan AIDC as a new point of interest.
Ulsan Metropolitan City is currently home to key energy infrastructure, including SK Gas’s LPG and LNG procurement network, Korea Energy Terminal (KET), and Ulsan GPS. As data centers are added following the start of AIDC operations in 2027, demand for electricity and LNG is expected to rise together, potentially increasing the utilization of existing assets such as Ulsan GPS and KET.
SK Gas has expanded its business from LPG imports and distribution into LNG infrastructure and power generation. In particular, its approximately 1.2 GW Ulsan GPS facility can generate power using either LNG or LPG, depending on which fuel offers greater price competitiveness. The ability to sell or trade procured energy sources or use them for power generation provides flexibility that strengthens earnings resilience.
The core LPG business is also expected to recover in the second half of the year. Since a substantial portion of the second-quarter loss resulted from a timing difference in recognizing gains and losses between physical assets and derivatives, analysts assess that the company’s annual earnings capacity remains largely unchanged. With Ulsan GPS entering full-scale operation, operating profit from power generation is expected to reach KRW 212.8 billion in 2027.
Large-scale investments have also entered the recovery phase. Son said, “With the investments in Ulsan GPS and KET largely completed, the burden of capital expenditures (CAPEX) will decline and cash-generation capacity will increase.” She added, “The next shareholder-return policy to be unveiled at the CEO Investor Day in October could also become an additional catalyst for an increase in corporate value.”
Earnings are expected to recover from the third quarter. Operating profit is projected at KRW 425.3 billion this year and KRW 516.9 billion in 2027, an increase of 21.5%. The operating margin is also expected to rise from 4.2% to 5.4%.
She added, “Ultimately, the significance of the AIDC lies not in adding a new business to SK Gas, but in serving as a source of demand that increases the utilization rates and asset values of Ulsan GPS and KET, which have already been established. The energy value chain that expanded from LPG into LNG and power generation has entered a phase of reevaluation as the AI era begins.”
[email protected] Kang Gu-gwi Reporter