SK Innovation E&S said on the 27th that natural gas produced at Australia's Barossa gas field was transported to the Darwin liquefied natural gas (LNG) terminal and that the first LNG cargo shipment has been completed.
The Barossa gas field is located offshore about 300 kilometers from the northwest coast of Australia. The equity stakes are SK Innovation E&S 37.5%, Australia's Santos 50%, and Japan's JERA 12.5%. SK Innovation E&S invested a total of $1.6 billion (about 2 trillion won) in reserves assessment, permits, and construction of offshore and onshore facilities. Since joining the project in 2012, 14 years of continued overseas resource development efforts have borne fruit.
Starting with this production, SK Innovation E&S will secure 1.3 million tons (t) of LNG annually for the next 20 years. This volume is about 3% of Korea's total annual LNG imports. The company said securing a large energy source stably will help strengthen Korea's energy security.
Instead of building a new LNG terminal, the project cut investment by adopting a "brownfield" approach that retrofits and reuses facilities at the Darwin LNG terminal near the Barossa gas field. It also enhanced price competitiveness by lowering transportation expense by importing gas from Australia, which is geographically closer than the Middle East or the United States (about 10 days shipping time).
Lee Jong-su, president of SK Innovation E&S, said, "The first LNG production from the Barossa gas field is a result achieved by corporations in the private sector that took on a decades-long challenge with a long-term perspective in the high-risk field of resource development," adding, "We expect it to play a key role in establishing domestic resource security through stable energy supply and in solidifying the business base of SK Innovation E&S."