"Global Carbon Capture Initiative"... SK E&S Joins World's Largest US CCS Project

[Asia Economy Reporter Donghoon Jeong] SK E&S is accelerating its efforts to target the global carbon capture market.

On the 10th, SK E&S announced that it will invest in a North American 'CCS (Carbon Capture and Storage)' project together with leading energy companies in the United States.

This project is the world's largest CCS project capable of capturing and storing up to 12 million tons of carbon dioxide (CO₂) annually from 32 corn ethanol production facilities across five states in the U.S. Midwest. The captured carbon dioxide from each plant will be transported through a dedicated pipeline stretching 3,200 km and permanently stored in an underground carbon storage facility to be constructed in North Dakota.

The United States has implemented a biofuel blending mandate since 2005, requiring gasoline vehicles to blend at least 10% bioethanol to reduce fossil fuel use. Based on stable demand, the U.S. ranks first in the world in both bioethanol production and consumption. Bioethanol, mainly extracted by fermenting grains such as corn and sugarcane, is used not only as vehicle fuel but also as an industrial raw material, among other uses. However, it has the drawback of generating CO₂ during the production process.

SK E&S plans to invest $110 million (approximately 130 billion KRW) to acquire about a 10% stake in Summit Carbon Solutions, the project operator. This CCS project is scheduled to begin construction of carbon dioxide storage facilities and pipelines in the first half of next year, aiming for commercial operation in the second half of 2024. The U.S. Midwest region, through which the pipeline passes, is densely populated with factories emitting large amounts of CO₂, including bioethanol facilities and ammonia production bases, so CCS demand is expected to continue increasing.

Aerial view of the bioethanol production facility complex located in the U.S. Midwest. Photo by SK E&S

SK E&S announced that it will join hands with Summit Agricultural Group (hereafter ‘Summit’), a North American agriculture and livestock investment specialist, Continental Resources, one of the largest oil and gas companies in the U.S., and Texas Pacific Group (TPG), a global private equity firm. They have formed a 'dream team' with leading companies in each field to secure a leading position in the U.S. carbon reduction market.

SK E&S revealed plans to build optimal CCS infrastructure through strategic synergy with Summit, which has extensive experience in biofuel businesses in the U.S. and Latin America, and Continental, which possesses diverse pipeline operation know-how in the oil and gas sector. Notably, Continental has maintained a strong partnership with SK E&S since 2014 by jointly developing the Woodford Shale gas field in the U.S.

SK E&S expects that its CCS projects underway in Australia and the U.S. will significantly contribute to achieving SK Group’s company-wide carbon reduction goals. Previously, SK Group set a specific target to reduce 200 million tons of carbon, which is 1% of the global carbon reduction target of 21 billion tons by 2030. In particular, the CCS projects based on depleted gas fields and deep saline formations that SK E&S is promoting are likely to expand in scale, and are expected to play a key role as SK Group’s forward base for carbon neutrality in the future.

Yoo Jung-joon, Vice Chairman of SK E&S, said, "CCS is an important technology that can directly reduce carbon dioxide generated not only from natural gas but also from various energy sources such as biofuels. SK E&S will actively promote low-carbon energy businesses including CCS in the U.S. and make every effort to contribute substantially to reducing about 100 million tons, which is 5% of the greenhouse gas reduction target set by the U.S. government for 2030."

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