Korea’s SK Gas to invest $1.5 bn toward carbon neutrality by 2026

ULSAN – SK Gas Ltd. South Korea’s leading liquefied petroleum gas (LPG) supplier, is set to spend $1.5 billion on liquefied natural gas (LNG) and hydrogen energy for carbon neutrality as the company seeks future growth from eco-friendly industries, its chief executive said.

“Toward a goal of carbon neutrality, we plan to invest 2 trillion won ($1.5 billion) in new businesses such as LNG,” said SK Gas CEO Yoon Byung Suk on Wednesday, adding that the earmarked spending totals 4.6 trillion won if partners’ investments are included.

“We also aim to enter the carbon-free power generation business, using hydrogen instead of LNG.”

SK Gas plans to transform into an LNG company that imports, stores and supplies the gas from 2024 with an end goal to switch its business focus to hydrogen.

WORLD’S FIRST POWER PLANT USING BOTH LNG AND LPG

The unit of South Korea’s No. 2 conglomerate SK Group has since last September been building the world’s first power plant that uses both LNG and LPG as fuel with an investment of 1.4 trillion won in the coastal city of Ulsan, about 310 kilometers (192.6 miles) southeast of Seoul. 

Steel structures up to 40 meters high have already been erected in each corner of the 140,000-square-meter site, enough for 19 soccer fields. Inside the structures, the plant’s core equipment including two gas turbines and one steam turbine was installed.

“The progress rate of the project reached 77% as of April,” said a company official. “We will see the form of a power plant in the next four months as those steel structures will be covered with a concrete exterior.”

SK Gas plans to complete the construction and start a test run in February next year with a commercial operation launch target of August 2024. The plant will generate 1.2 gigawatts of electricity, enough to power 2.8 million households each year.

The facility is expected to consume 800,000 tons of LNG a year but will use LPG as a fuel when natural gas prices soar, helping SK Gas maximize its economics, company officials said. Once the company secures a hydrogen value chain, it will use hydrogen fuel instead of LNG.

Write to Mi-Sun Kang at misunny@hankyung.com
 
Jongwoo Cheon edited this article.