SK E&S Co. has shipped its first cargo of liquefied natural gas (LNG) from the Barossa gas field off northern Australia, marking the start of production from a project it joined more than a decade ago and a milestone in its overseas energy strategy.
The natural gas business unit of South Korea’s SK Group said on Tuesday that the gas was produced at the offshore Barossa field and transported to the Darwin LNG terminal, where it was loaded onto an LNG carrier.
The shipment marks a rare case of a South Korean private company taking an overseas gas project through from early development to LNG production, the company said.
The start of shipments is significant for SK E&S because it converts a long-gestation upstream investment into a stable source of supply at a time of heightened volatility in global gas markets.
It also secures long-term LNG volumes without relying solely on spot purchases.
Image by SK E&S · Gemini (Nano Banana)
LONG-DELAYED PROJECT ENTERS PRODUCTION
SK E&S holds a 37.5% stake in the Barossa project, which it joined in 2012. The field is operated by Australia’s Santos Corp., which owns 50%, alongside JERA from Japan, with 12.5%. The partners have invested $1.6 billion in total.
Located roughly 300 kilometers offshore from Australia’s northwest coast, the field feeds into existing LNG infrastructure in Darwin.
The use of a refurbished terminal, rather than building a new one, helped lower development costs and shorten the path to production, the company said.
SK E&S expects to secure 1.3 million metric tons of LNG a year for the next 20 years, equivalent to about 3% of South Korea’s annual LNG imports.
The company plans to use the gas for domestic power generation and, over time, as feedstock for hydrogen production after carbon removal.
Jennifer Nicholson-Breen edited this article.