SK Innovation E&S to import condensate from Australian gas field

A floating production, storage and offloading (FPSO) facility at the Barossa gas field to load condensate / Courtesy of SK Innovation E&S

SK Innovation E&S, the energy arm of Korea's SK Group, said Monday it will import condensate from an Australian offshore gas field that it invested in 14 years ago, marking the first such shipment to Korea from the project.

The company began production in January at the Barossa gas field, located about 300 kilometers off Australia's northwestern coast.

The initial shipment of 300,000 barrels of condensate is scheduled to arrive at the port of Incheon, just west of Seoul, early next month, the company said in a press release.

The condensate will be used as feedstock at the company's petrochemical plant in Incheon to produce naphtha for use in the production of high-value-added products, such as paraxylene and jet fuel, it said.

SK Innovation E&S is entitled to 1.1 million barrels of condensate out of the 3 million barrels expected to be produced annually from the Barossa field, based on its stake in the project.

The company acquired a 37.5 percent stake in the Barossa project in 2012. Australian energy producer Santos holds a 50 percent stake, while Japan's largest power generator, JERA, owns the remaining 12.5 percent.

The three companies have jointly invested about 2 trillion won ($1.6 billion) in the project, covering activities ranging from gas reserve assessments to the construction of production facilities, the company said.

In February, the company shipped liquefied natural gas (LNG) from the Barossa field to Korea, marking the first time a private Korean company had produced LNG through an overseas resource development project.

SK Innovation E&S expects to secure 1.3 million metric tons of LNG annually from the Barossa field over the next 20 years. The volume is equivalent to roughly 3 percent of Korea's annual LNG imports.