SK Innovation E&S participated in the development of the Barossa gas field in Australia, which will fully commence operations in the third quarter of this year as conflicts with local indigenous peoples and environmental groups have been resolved.
According to industry sources on the 4th, the Barossa gas field, in which SK Innovation E&S has made an equity investment, is expected to begin liquefied natural gas (LNG) production in the third quarter of this year. SK E&S has been developing the Barossa gas field in partnership with Australian energy company Santos and Japanese power company JERA since 2012, and the project is currently about 88% complete.
The conflict with environmental groups surrounding the Barossa gas field has concluded with a victory for SK E&S and its joint venture partners. Local indigenous peoples had filed lawsuits through environmental groups, demanding a halt to construction, citing concerns over potential damage to the marine ecosystem and underwater cultural heritage during the development process.
An Australian court found insufficient grounds for the claims made by the environmental groups and ordered Santos to pay approximately 9.04 million Australian dollars (about 810 million won) in litigation costs at the end of last year. The environmental groups' injunction lawsuit related to the development permit for the Barossa gas field delayed construction for more than a year. Previously, the Australian Maritime Safety Authority had also reapproved drilling permits that had been delayed due to opposition from some indigenous peoples. This was the result of the South Korean government directly engaging with the Australian government, while SK E&S sought to submit additional materials and reapply for permits.
SK E&S plans to produce an average of 1.3 million tons of low-carbon LNG annually by applying carbon capture and storage (CCS) technology, which has already been commercialized at the Barossa gas field, to remove carbon dioxide. This volume corresponds to 3% of the domestic annual LNG consumption. The confirmed reserves of the Barossa gas field exceed at least 70 million tons.
Recently, LNG has been gaining prominence in the global market, particularly centered around the United States. President Donald Trump has highlighted intentions to revive fossil fuels by increasing oil and gas drilling and expanding LNG exports. LNG is being recognized as an energy source that plays a bridging role in the transition from fossil fuels to renewable energy.
In the medium to long term, SK E&S plans to utilize some of the LNG produced at the Barossa gas field for blue hydrogen production (clean hydrogen with captured and stored carbon dioxide to reduce carbon emissions). However, the establishment of the blue hydrogen production base (plant) in Boryung is delayed, having failed to win the government clean hydrogen power system (CHPS) bid last year.