The company concluded a contract with Freeport LNG in the United States for importing 2.2 million tons a year.
It will import shale gas for 20 years starting in 2019…it will increase energy portfolios of SK Group.
SK E&S will import large volume of shale gas from North America, starting in 2019.
SK E&S (President: Yu Jeong-joon) recently said that it concluded a contract with Freeport LNG in the United States for natural gas liquefaction service. SK E&S plans to import 2.2 million tons of LNG annually for 20 years starting in 2019 by liquefying shale gas at the natural gas liquefaction plant to be constructed in Texas by Freeport LNG.
The volume of 2.2 million tons represents about 6% of total volume of LNG imported by Korea a year, and it will amount to over $30 billion based on the current average price of LNG when it is imported for 20 years.
Now that SK E&S concluded a contract for importing shale gas, SK Group can assort a variety of energy portfolios, including oil, LNG, LPG and shale gas, solidifying its foundation as a comprehensive energy company.
Chairman Choi Tae-won of SK Group has been advocating the ‘energy powerhouse vision’ saying that ‘energy reserves will be core factor for enhancing competitiveness of the nation in the future, and the most important mission of an energy company is to secure and develop resources’. And import of shale gas in large volume is expected to help Korea move one step forward toward the energy powerhouse.
Watching shale gas in North America, SK E&S has been seeking to secure natural gas liquefaction facilities, but it failed in that endeavor due to offensive of competing major energy companies.
SK E&S is examining various means of securing shale gas for liquefying at facilities of Freeport LNG.
As its production costs are lowered thanks to development of new technologies, the price of shale gas in North America is around $3~4 per MMbtu, and its price is expected to be lower than that of conventional gases in Korea even though costs for liquefaction and transportation are added when importing it.
SK E&S’s President Yu Jeong-joon said, “Since overseas resources development projects require huge amount of investments and have high risks, it is needed to inject large amount of resources for long period of time with macroscopic and strategic perspective. So, such projects are difficult to succeed without fast decision and support of top management of the Group. Leveraging the ‘challenge spirit’ of a private company, SK E&S will exert more effort to achieve its goal of becoming a ‘global gas and power company’, reinforce energy security of Korea and raise ratio of independently developing energies of the country.”
Source : e2news