SK Gas’ 1st LNG terminal completes test operations

With the completion of the terminal, SK will advance into the LNG midstream sector

The LNG carrier Grace Cosmos unloads about 65,000 tons of LNG at the Korea Energy Terminal in the port of Ulsan (Courtesy of SK Gas)

Hyung-Kyu Kim 1

Apr 22, 2024 (Gmt+09:00) khk@hankyung.com

Energy

SK Gas Ltd., South Korea’s No. 1 liquefied petroleum gas (LPG) distributor, has completed the test operation of its first liquefied natural gas (LNG) terminal in its first step forward to expand into the LNG trading market.

The company said on Monday that the LNG vessel of Grace Cosmos carrying about 65,000 tons of LNG unloaded it at the Korea Energy Terminal (KET) in the port of Ulsan, South Gyeongsang Province on April 5.

It then completed the cooling process of tanks and piping facilities.

SK has built the LNG terminal jointly with the Korea National Oil Corp. for commercial operations in the second half of this year.

With the completion of the terminal, SK is poised to enter the LNG midstream market, or storage of the fuel, beyond LPG imports.

SK Gas operates LPG stations across South Korea

Ulsan GPS is the world’s first LNG and LPG combined cycle power plant, using LNG and LPG as fuel. It is scheduled for commercial operation in the second half of this year simultaneously with the Korea Energy Terminal.

Its power generation capacity reaches 1.2 gigawatts, equivalent to one nuclear power plant.

The LNG stored in the first tank at the KET will be transported to Ulsan GPS through direct pipes connecting the two facilities. Its storage tanks will be leased to other SK Group units such as SK Energy Co. and S-Oil Corp.

Ulsan GPS, located about five kilometers away from the terminal, will use 900,000 to 1 million tons of LNG annually.

Western Europe's largest LNG plant Hammerfest LNG in Hammerfest, Norway (Courtesy of Reuters via Yonhap News)

Including the three tanks at SK’s hydrogen energy complex, dubbed Clean Energy Complex, near the KET, SK Gas will have a total of six LNG storage tanks with a total capacity of 7.2 million tons.

SK will continue test runs of both Korea Energy Terminal and Ulsan GPS until their commercial operations in the second half as scheduled.

“We will accelerate business expansion into the LNG field and grow into a major LNG operator in Northeast Asia by 2030,” said Yoon Byung Suk, chief executive of SK Gas.

The SK Group arm aims to transform into an LNG trader from imports to storage and distribution and eventually into a hydrogen energy supplier.

Write to Hyung-Kyu Kim at khk@hankyung.com

Yeonhee Kim edited this article.