SK E&S invests $110 million in world’s largest carbon capture project

SK E&S Co., the natural gas business unit of South Korea’s SK Group, is investing $110 million for a 10% stake in Summit Carbon Solutions LLC, which is leading the world’s largest carbon capture and storage (CCS) project in the US.

The project aims to capture and store up to 12 million tons of carbon dioxide annually from 32 corn ethanol plants in five US Midwest states, SK E&S said on Tuesday.

Captured carbon dioxide will then be transported through a 3,200 km pipeline to an underground storage facility to be built in North Dakota.

Construction of the storage facility and the pipeline will begin in the first half of next year with commercial operations scheduled for the second half of 2024, according to SK.

The project will be joined by Summit Agriculture Group, a North American farming and agricultural sector investor; Continental Resource, a US petroleum and gas company; and global private equity firm TPG Inc., previously known as Texas Pacific Group.

The US government has implemented a renewable fuel policy since 2015, requiring at least 10% of ethanol to be blended into gasoline in the US, the world’s largest bioethanol producer and consumer.

To achieve carbon neutrality by 2050, the US is providing various incentives for the CCS technology industry.

The amount of carbon dioxide processed through CCS technology in the US is expected to rise at an average annual rate of 12% to 71 million tons by 2030 from 29 million tons this year.

FOOTHOLD IN GLOBAL CCS PROJECTS

By participating in the project, SK said it seeks to establish a foothold in the carbon capture and storage business around the world.

“Starting with this US project, we will aggressively pursue low-carbon energy opportunities globally,” said Chief Executive Yu Jeong-joon.

SK E&S, primarily engaged in natural gas development projects, has been bolstering its renewable energy business amid an industry-wide shift toward eco-friendly energy sources.

Last year, the company showcased its CCS technology to produce low-carbon natural gas at the Barossa gas field, off Australia’s Northern Territory.

SK said its CCS projects in Australia and the US will help SK Group meet its goal of reducing carbon dioxide by 200 million tons by 2030.

Write to Ik-Hwan Kim at lovepen@hankyung.com
In-Soo Nam edited this article.