14 Years of Investment Bear Fruit... SK Innovation E&S Begins First Production at Barossa Gas Field

Achievement Realized After 14 Years Since Joining the Project in 2012
Expected to Secure 1.3 Million Tons of LNG Annually for 20 Years

SK Innovation E&S has achieved a visible milestone in overseas resource development by completing its first LNG shipment, liquefying natural gas produced at the Barossa Gas Field in Australia.

Barossa Gas Field in Australia (under development). Provided by SK Innovation E&S

On January 27, SK Innovation E&S announced that natural gas produced at the Barossa Gas Field, located offshore in northwestern Australia, had been transported to the Darwin LNG terminal and the first LNG cargo had been shipped. The Barossa Gas Field is situated approximately 300 kilometers off the northwestern coast of Australia, with SK Innovation E&S holding a 37.5% stake, Santos 50%, and JERA 12.5%.

SK Innovation E&S invested a total of 1.6 billion dollars (approximately 2 trillion won) in reserve assessment, permits, and construction of both offshore and onshore facilities. Since joining the project in 2012, 14 years of overseas resource development efforts have now entered the full-scale production phase.

With the commencement of production, SK Innovation E&S will secure 1.3 million tons of LNG annually for the next 20 years. This volume accounts for about 3% of Korea’s annual LNG imports and is expected to contribute to enhancing the stability of mid- to long-term energy supply amid significant volatility in the global energy market.

The company also improved cost efficiency in its business approach. Instead of building a new LNG terminal, it adopted a brownfield strategy by modifying and utilizing the existing Darwin LNG terminal facilities, thereby reducing initial investment costs. Additionally, by importing gas from Australia, which is closer than the Middle East or the United States, the transportation period was shortened to around 10 days, further enhancing price competitiveness.

Lee Jongsu, President of SK Innovation E&S, stated, “The first LNG production from the Barossa Gas Field is a testament to the long-term investment and technology accumulated in the high-risk field of resource development. We will further solidify our business foundation while contributing to strengthening Korea’s energy security through a stable energy supply.”