SK Gas Ltd., South Korea’s leading liquefied petroleum gas (LPG) supplier, has made significant strides in its transformation into a clean energy company with the upcoming launch of the world’s first liquefied natural gas (LNG)/LPG combined cycle power plant. The Ulsan GPS (UGPS) facility, operated by SK Gas’ subsidiary, successfully initiated the firing of two gas turbines, each with a capacity of 400 megawatts (MW), and began distributing LNG-fired electricity to the grid managed by Korea Electric Power Corp. early last month.
Located in Ulsan, about 310 kilometers southeast of Seoul, UGPS is a pioneering power plant utilizing both LNG and LPG as fuels, aiming to provide a cleaner energy solution. The $1 billion project, expected to generate 1.2 gigawatts (GW) of power, will supply electricity to approximately 2.8 million households annually.
UGPS is projected to consume between 900,000 to 1,000,000 tons of LNG annually, which will be supplied via pipelines directly connected to the Korea Energy Terminal (KET). This close proximity, just 5 kilometers from the plant, ensures minimal LNG delivery costs, thereby maximizing profits.
The plant’s innovative design allows for the use of cheaper LPG when global LNG prices rise, providing flexibility and cost-efficiency. SK Gas plans to commence the commercial operation of UGPS in the second half of this year after test-firing the gas and steam turbines with LPG.
This development marks a crucial step in SK Gas’s broader strategy to expand its LNG and hydrogen businesses, aiming for carbon neutrality. The company’s long-term vision includes transforming into an LNG company that imports, stores, and supplies clean gas from 2024, with an ultimate shift to hydrogen-focused operations.
To achieve these goals, SK Gas has invested heavily in infrastructure. The UGPS construction began in September 2022, and the KET, built jointly with Korea National Oil Corp., completed its test operations in April. SK Gas’s Clean Energy Complex near KET will feature six LNG storage tanks with a total capacity of 7.2 million tons, further supporting its ambitious energy plans.
In April 2023, SK Gas announced a 2 trillion won investment in new LNG-related businesses, underscoring its commitment to eco-friendly energy sources. The successful test operations at UGPS highlight SK Gas’s leadership in innovative energy solutions and its dedication to a sustainable future.
