[Report] SK Gas's Vision for Net Zero... Visiting Ulsan KET, the Core LNG Hub

From LNG Introduction to Storage and Supply
Establishing Core Infrastructure... Targeting 2024
SK Gas Manages 100% of LNG Business
"Securing Fixed Demand and Revenue Stability"

Interior view of the LNG storage tank installed at Ulsan Korea Energy Terminal (KET). / Photo by Seoyoon Choi sychoi@

[Asia Economy Reporter Choi Seoyoon] On the 20th, inside the Korea Energy Terminal (KET), located on a 90,000-pyeong site adjacent to Ulsan North Port, a massive liquefied natural gas (LNG) storage tank was undergoing internal construction. This tank stores LNG in liquid form at -162 degrees Celsius. The LNG tank, shaped like a cylindrical pillar, has an exterior wall height of 54.7 meters and an external diameter of 88.4 meters. It is large enough to fit two Boeing 747 jumbo jets. It can store 215,000 cubic meters of LNG. This amount can operate the 1.2GW Ulsan GPS power plant for 30 days and supply electricity to 450,000 households in Ulsan for six months.

Once LNG is injected, the tank is never opened again, making it impossible to see inside. The dome-shaped steel roof weighs 1,500 tons, equivalent to 700 passenger cars. The roof was installed using an air-lifting method by injecting air from the sealed floor to lift it. Lee Giwon, KET Project Management Team Manager, explained, "When weak air is injected from below, the 1,500-ton steel plate rises 50 meters over three hours due to buoyancy from air pressure. All 12 oil tanks installed at KET, including the LNG tank, had their roofs raised using this method."

The ceiling's internal material is 9% nickel steel. Since LNG tends to vaporize easily when it touches the walls, special aluminum plates block the surface. To prevent vaporization, the 1.5-meter space between the outer and inner walls is filled with 'cellular blocks' (a type of brick) made of thin insulating particles mixed with fiberglass. The floor has three layers of cellular blocks stacked 70 to 80 cm high, and the ceiling has six layers stacked.

◆ Tanks That Will Never Collapse Even in Earthquakes... Three More to Begin Construction Next Month = The LNG tank's exterior wall is surrounded by pre-stressed concrete. The pre-stressing increases the tank's structural strength to prevent LNG leakage accidents. It resembles a thermos bottle. Additionally, 872 piles were driven 25 meters into the underground bedrock. The piles and tank are firmly fixed together with rebar. Lee Giwon said, "Even if the ground shakes and the tank sways, it will not collapse. It is designed to withstand earthquakes with a recurrence period of 4,800 years."

There is another LNG tank on the vast site. Construction of the third LNG tank will begin next month. Right in front of the tank is a pier capable of docking large vessels with a capacity of 180,000 cubic meters. It is designed to allow LNG storage and unloading operations to be conducted nearby. Three fuel transport ships can dock and unload simultaneously. The current 12 oil tanks will be increased to a total of 29. The total storage capacity of tanks within KET is 1.35 million barrels of LNG and 1.38 million barrels of petroleum products, totaling 2.73 million barrels.

Exterior of LNG storage tank installed inside Ulsan KET / Photo by Seoyoon Choi sychoi@

KET is an energy project led by SK Gas. The core of the project is to establish essential infrastructure capable of LNG import, storage, and supply. Groundbreaking took place in 2020, with commercial operation targeted for 2024. SK Gas holds a 47.6% stake in KET, making it the second-largest shareholder. Although Korea National Oil Corporation holds the largest share at 52.4%, SK Gas fully manages the LNG business. Gil Homun, Head of KET Management Support Division, explained, "More than 80% of KET's revenue comes from the LNG sector. SK Gas guarantees costs and profits as a fixed demand source for LNG business, enabling stable operations."

◆ KET Project Revived by SK Gas... Targeting Commercial Operation in 2024 = The original project name of KET, selected as a national agenda in 2013, was Korea Oil Terminal (KOT). The project faced many difficulties in shareholder composition and progress, including challenges in attracting foreign investors, causing long delays. SK Gas emerged at that time. Gil Homun said, "The government agreed with SK Gas's proposal that expanding the business area to include LNG alongside oil would improve profitability. In 2019, a joint venture (JV) contract was signed, and the project was relaunched under the name KET."

The LNG business based on KET is expected to expand gradually by securing various demand sources. Currently, SK Gas is investing about 1.4 trillion KRW in Nam-gu, Ulsan, to build the world's first LNG-LPG combined cycle power plant, Ulsan GPS (Gas Power Solution), with a capacity of 1.2GW. Ulsan GPS, targeting commercial operation in 2024, plans to use approximately 800,000 tons of LNG annually.

SK Gas, the top LPG company in Korea, declared last year in its financial story that it aims to become a 'Net Zero Solution Provider.' To achieve this vision, it is adding LNG as a new business alongside its core LPG business and is implementing a phased strategy to transition its portfolio to zero-carbon hydrogen business.

Kim Yongbeom, Vice President of SK Gas, said, "Unlike domestic LNG import terminals that are far from industrial complexes, KET is the only one located within the Ulsan industrial complex, which means an advantage in economic costs and infrastructure." He added, "We will build a competitive hydrogen supply infrastructure centered on LNG from raw material import to consumption."