SK Innovation E&S, the energy unit of South Korea's SK Group, has begun production at the Barossa gas field in Australia, a project it invested in 14 years ago. This marks the first time a Korean private-sector company has achieved LNG production through an overseas resource development project. The initial output is expected to secure 1.3 million tons of LNG annually, equivalent to about 3 percent of Korea's annual LNG imports.
SK Innovation E&S announced on Tuesday that it has started liquefied natural gas (LNG) production at the Barossa gas field, located about 300 kilometers off Australia's northwestern coast. The initial cargo of LNG has been transported to the nearby Darwin LNG terminal and shipped to Japan.
The project originated in 2012 when SK Innovation E&S acquired a 37.5 percent stake. Australian oil and gas producer Santos holds 50 percent, and Japan's largest power generation company JERA owns 12.5 percent. The three partners have jointly invested around 2 trillion won ($1.6 billion) in activities from gas reserve assessments to building production facilities.
A company official stated, "The projected LNG volumes will help both the company and the country better cope with uncertainties in the global energy market, which is vulnerable to geopolitical risks, such as international disputes."
Over the next 20 years, SK Innovation E&S expects to secure 1.3 million tons of LNG annually from the field, accounting for roughly 3 percent of South Korea's yearly LNG imports. The Barossa field operates using a floating production, storage, and offloading (FPSO) facility, marking a milestone as the first LNG production achievement by a Korean private firm in an overseas project. This development strengthens the company's position in the global energy supply chain.
