SK E&S Accelerates 'Carbon Capture'... East Timor Gas Field to Carbon Storage Site

Bayu-Undan Gas Field → CCS Plant Basic Design
'Carbon Neutral LNG Era' Transition Speed

Utilizing Carbon Storage from Blue Hydrogen Production at Australia's Barossa Gas Field and Others

A panoramic view of the Bayu-Undan gas field in Timor-Leste, where major energy companies such as SK E&S and Australia's Santos have begun FEED (Front-End Engineering Design) work for the conversion of carbon capture and storage (CCS) facilities. (Photo by SK E&S)

[Asia Economy Reporter Moon Chaeseok] SK E&S, the main affiliate of SK Group's hydrogen business, has started a project with an Australian company to convert an offshore gas field in Timor-Leste into a carbon storage facility. As part of SK E&S's carbon capture and storage (CCS) business, this move is expected to accelerate the company's efforts toward the 'low-carbon liquefied natural gas (LNG) era' that it has emphasized.

On the 10th, SK E&S announced that it will begin the front-end engineering design (FEED) necessary to convert the Bayu-Undan natural gas production facility offshore Timor-Leste into a CCS plant. The gas field, which is expected to cease production soon, will be repurposed as a carbon storage site. The Bayu-Undan gas field shares are jointly held by SK E&S (25%) and four other global energy companies including Santos of Australia, Eni of Italy, and Inpex of Japan. FEED refers to the process of verifying the feasibility of the technologies applied to the project and deriving the equipment design and investment costs before the final investment decision (FID). SK E&S and its four partners will analyze the entire process of carbon capture technology, transportation, and storage to specify the design and investment costs.

Accordingly, SK E&S's low-carbon LNG business is also expected to gain momentum. Previously, SK E&S has been producing low-carbon LNG by applying CCS technology to the Barossa gas field in Australia, which it has been involved in developing since 2012. Through an FID in March last year, the company announced plans to import approximately 1 million tons annually for 20 years starting in 2025 from the Barossa gas field to Korea for blue hydrogen production and other uses. The conversion of the Bayu-Undan gas field into a CCS plant is one of the necessary tasks to execute this project. The natural gas produced at the Barossa gas field will be transported to the Darwin LNG liquefaction plant in Australia, where carbon will be separated at the carbon capture (CC) facility to be established at the Darwin plant. The extracted carbon will then be sent via the Bayu-Undan natural gas pipeline about 500 km away to a depleted gas field, where it will be permanently stored underground in a sandstone layer approximately 3 km deep. Additionally, carbon emissions generated during the natural gas liquefaction process will be fully offset through carbon credit purchases. An SK E&S official explained, "Through this series of project implementations, we ultimately plan to import 'carbon-neutral LNG' to Korea."

SK E&S stated that securing an overseas carbon storage site capable of handling not only the carbon generated from the Barossa gas field but also the carbon emitted during future domestic blue hydrogen production is significant. The Bayu-Undan CCS plant can store about 10 million tons of carbon annually, with potential to expand its capacity in the future. SK E&S expects that the Bayu-Undan CCS facility will enable CCS processing to meet increasing demand in Australia and Asia. SK E&S plans to actively utilize the Bayu-Undan production base as the company's 'carbon-neutral forward base.' To this end, it intends to enhance economic efficiency by repurposing existing production facilities and subsea pipelines of the Bayu-Undan gas field as carbon transportation and injection facilities. Along with the FEED work, SK E&S will proceed with procedures such as obtaining permits for the CCS project with the Australian and Timor-Leste governments, and plans to begin full-scale construction of the CCS facility early next year. Moon Sangyo, head of SK E&S's LNG division, said, "We will develop Bayu-Undan CCS into a global carbon-neutral hub through advanced technological capabilities and thorough verification," adding, "As a responsible energy company, we will continue to strive for the development of low-carbon gas fields."

This content was produced with the assistance of AI translation services.