SK Accelerates Carbon Capture and Storage Project... "Energy Alliance with Australia's Santos"

President Choo Hyung-wook Meets Santos CEO at Gas Conference
Discusses Joint Development Plan for Barossa Gas Field Project

Gallagher, Santos CEO, "Secured Proven CCS Technology"
"Operating Barossa Gas Field as Low-Carbon LNG Project"

Chu Hyung-wook, President of SK E&S (center), is touring the SK E&S exhibition booth with Kevin Gallagher Santos, CEO (left), at the Daegu World Gas Conference (WGC2022) exhibition hall on the 25th.

[Asia Economy Reporter Moon Chaeseok] SK is accelerating its entry into the carbon-neutral core technology of carbon dioxide capture and storage (CCS) business. Its energy-related affiliate, E&S, has agreed to cooperate with Santos, Australia's largest energy company, to build related facilities and promote the business in Australia.

On the 25th, SK E&S announced that President Chu Hyung-wook discussed CCS technology, natural gas, and clean hydrogen collaboration plans with Kevin Gallagher, CEO of Santos, at the World Gas Conference (WGC2022) held in Daegu. The WGC is a conference where major global oil and gas companies gather and is called the "Olympics of the gas industry." This year, it was held in Korea for the first time. About 350 energy companies from over 90 countries, including SK E&S, Chevron, ExxonMobil, Korea Gas Corporation, and Hyundai Motor Company, participated.

President Chu and CEO Gallagher shared progress on the Barossa gas field development project jointly promoted in Australia and discussed collaboration plans. The two agreed to strengthen cooperation to ensure the Final Investment Decision (FID) for the CCS plant planned for the Barossa gas field proceeds smoothly. Earlier in March, the two companies began basic design work to convert the Bayu-Undan gas field offshore Timor-Leste into a CCS storage site. They are currently undergoing approval procedures with the Australian and Timor-Leste governments.

The Australian government is also supporting the project. According to SK E&S, the Australian government has announced plans to reduce CCS costs to less than 20 Australian dollars (about 18,000 KRW) per ton by 2030. Last year, it decided to support CCS-related projects with approximately 270 million Australian dollars (about 240 billion KRW) over ten years. The two companies plan to closely collaborate with the Australian government to explore additional investment opportunities in local CCS-related projects.

Chu Hyung-wook, President of SK E&S (center), is touring the SK E&S exhibition booth at the Daegu World Gas Conference (WGC2022) exhibition hall on the 25th with Kevin Gallagher Santos, CEO (left).

Santos is a company engaged in oil and gas field development projects worldwide, including Australia. After declaring '2040 Net Zero (carbon neutrality)' last year, it is accelerating its business. CEO Gallagher visited the SK E&S booth and emphasized, "CCS is the most realistic alternative to effectively reduce carbon dioxide generated during the use of fossil fuels such as natural gas," adding, "The Bayu-Undan plant of the two companies will provide a practical solution to reduce carbon from neighboring countries and industries."

He continued, "Australia has been a leading country in CCS, promoting large-scale carbon dioxide storage projects in offshore depleted gas fields since the early 2000s," and added, "Santos is proactively preparing for the carbon-neutral era by promoting not only the Bayu-Undan CCS plant but also the Mumba CCS project across South Australia."

President Chu said, "The CCS-based Barossa gas field development project is a meaningful project pursued as part of SK Group's emphasis on ESG (environment, social, governance) management," and responded, "Going forward, the two companies will continue to be partners leading the global low-carbon liquefied natural gas (LNG)-based carbon-neutral era through CCS technology advancement."

Additionally, the two companies agreed to collaborate on ▲carbon dioxide transport and storage for smooth blue hydrogen business promotion and ▲discovering new business opportunities related to carbon-neutral energy.

President Chu stated, "Australia is a resource-rich country with abundant energy sources such as natural gas, solar, and wind power, making it an 'energy blood alliance country' that must cooperate in Korea's energy transition process," and added, "Based on the solid partnership with Santos that has continued for over ten years, we will create remarkable achievements together in the carbon-neutral field."