SK Gas Subsidiary Ulsan GPS Signs 752 Billion KRW PF Agreement with Kookmin Bank and Others

The First Domestic Power Company to Secure Investment Funds through ESG Green Bond Issuance

The World's First 1227MW-Class LNG and LPG Dual-Fuel Combined Cycle Power Plant

On the 15th, at JW Marriott Hotel in Seocho-gu, Seoul, SK Gas signed a project finance agreement for its subsidiary Ulsan GPS, and officials posed for a commemorative photo. From the left: Lee Haewon, Head of SK Gas Division; Cho Seungho, CEO of Ulsan GPS; Woo Sanghyun, Vice President of KB Kookmin Bank. (Photo by SK Gas)

[Asia Economy Reporter Moon Chaeseok] SK Gas subsidiary Ulsan GPS announced that it successfully completed project financing (PF) for the construction of a combined cycle power plant in the Nam-gu area of Ulsan Metropolitan City and held a financial agreement ceremony on the 15th. This power plant is characterized by its 1,227 MW (megawatt) scale and the use of both liquefied natural gas (LNG) and liquefied petroleum gas (LPG).

The agreement ceremony held at the JW Marriott Hotel in Seocho-gu, Seoul, was attended by Ulsan GPS CEO Cho Seungho, representatives from SK Gas, KB Kookmin Bank as the lead financial institution, and advisory firms including the law firm Bae, Kim & Lee and Samil Accounting Corporation. Of Ulsan GPS's total investment cost of 1.412 trillion KRW, 360 billion KRW is equity capital, and the remaining investment is covered by 300 billion KRW in ESG (environment, social, governance) green bonds (corporate bonds) and 752 billion KRW in project financing funds arranged by KB Kookmin Bank.

Construction began in March, and the current progress rate is about 36%. The power transmission line construction is scheduled to start in October, with major equipment installation planned for the first quarter of next year, aiming for commercial operation in August 2024. The annual electricity production after commercial operation is expected to be approximately 8.6 million MWh (megawatt-hours), enough to supply about 2.8 million households for one year.

Ulsan GPS's strength lies in stable power supply and fuel cost competitiveness through dual-fuel power generation using LNG and LPG. In case of external restrictions on LNG fuel supply, stable power production is possible by receiving LPG from SK Gas. When LPG prices are lower than LNG, power generation can be done using LPG, ensuring fuel cost competitiveness.

Ulsan GPS will also contribute to greenhouse gas reduction as an eco-friendly power plant in the future. In February, it issued green bonds with the highest ESG grade, G1, recognizing its plans to reduce environmental pollutants through the introduction of the latest high-efficiency equipment and the adoption of carbon-free power sources. Ulsan GPS is the first domestic gas combined cycle power plant to receive ESG certification.

Ulsan GPS CEO Cho Seungho said, "The company plans to proactively pursue hydrogen co-firing to become a decarbonized power company," adding, "Through this, it will play a key role in achieving the parent company SK Gas's vision as a 'Net Zero (carbon neutrality) solution provider.'"

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