From Development to Liquefaction, Transportation, and Supply at the Barossa Gas Field

SK Innovation E&S is accelerating the expansion of its liquefied natural gas (LNG) supply chain based on the Barossa Gas Field in Australia, following ...

SK Innovation E&S's 14-Year Barossa Gas Field Project Becomes a New Pillar in the LNG Supply Chain SK Innovation E&S is accelerating the expansion of its liquefied natural gas (LNG) supply chain based on the Barossa Gas Field in Australia, following 14 years of investment.

The company has secured an annual volume of approximately 1.3 million tons of LNG from the Barossa Gas Field for the next 20 years and is expanding its customer base to Asian markets such as Vietnam.

SK Innovation E&S is pursuing a strategy to respond to international energy market price fluctuations and supply disruptions by directly participating in an integrated value chain that covers gas field development, LNG liquefaction, transportation, and power generation.

On September 29 (local time), SK Innovation E&S held a business briefing in Darwin, Australia, to announce its achievements in the Barossa Gas Field development and to unveil its global LNG value chain expansion strategy.

SK Innovation E&S is the first domestic private company to participate directly in the entire LNG value chain.

The process encompasses producing natural gas from the gas field, liquefying it at an LNG plant, transporting it directly, and supplying it to end-users such as power plants and industrial facilities.

Kim Hyunjun, Technical Advisor of the LNG Business Division at SK Innovation E&S, is explaining the development status of the Barossa gas field at a business briefing held in Darwin, Australia on the 29th (local time).

Photo by Jang Bokyung The Barossa Gas Field, which began full-scale production this year, serves as the core production base of the company’s value chain.

Located about 380 kilometers offshore north of Darwin, Australia, it holds an estimated 3.4 trillion cubic feet (Tcf) of natural gas reserves.

The field is also estimated to contain roughly 51 million barrels of condensate.

The ownership structure consists of Santos, the operator in Australia, with 50%, SK Innovation E&S with 37.5%, and JERA from Japan with 12.5%.

SK Innovation E&S has been engaged in the Barossa Gas Field project since 2012, carrying out exploration, assessment, permitting, and development over roughly 14 years.

Initially, the field was not regarded as highly commercially viable.

However, by drilling additional appraisal wells, the company was able to expand the reserves to almost three times the original estimate, enabling the transition to a large-scale LNG production project.

Kim Hyunjun, Technical Advisor of SK Innovation E&S LNG Business Division, explained, "When we acquired the Barossa Gas Field asset in June 2012, it was assessed to allow only small-scale LNG production.

Subsequently, by drilling five additional appraisal wells, we increased the reserves to nearly three times the initial estimate, securing commercially viable reserves for full-scale development." The LNG value chain extends through the entire process from gas field exploration and development to liquefaction, transportation, regasification, and final consumption such as power generation and heating.

SK Innovation The company secured the business foundation from production to liquefaction by acquiring a stake in the Darwin LNG terminal in 2020.

In March 2021, it made its final investment decision (FID) and commenced full-scale development.

The total development investment decided at that time was about 4.3 billion dollars, of which SK Innovation E&S’s share amounts to approximately 1.6 billion dollars.

This 14-year investment came to fruition with the first LNG production at the end of last year.