South Korea's top oil refiner SK Innovation joins carbon storage project in Australia

South Korea's top oil refiner SK Innovation said Aug. 8 that its upstream unit has joined a project to build a submarine carbon storage facility in Australia as part of its strategy to diversify beyond oil and natural gas development.

SK Earthon, the exploration and production subsidiary of SK Innovation, has acquired a 20% stake in the project to explore the G-15-AP submarine mining area off the northwest coast of Australia.

"The G-15-AP block marks the first mine to be used to store carbon captured from industries in Australia," SK Innovation said in a press release.

The project is 75% owned by InCapture, an Australian carbon capture and storage company, and 5% by CCS technology consulting company CarbonCQ.

The three entities will build the undersea facility and sign deals with local companies so as to start the CCS project from 2030, after feasibility studies to confirm the project's business value, according to SK Earthon.

"The CCS project in Australia is expected to generate synergy for SK Earthon's traditional business of energy development projects and new business of carbon capture and storage," it said.

SK Earthon is currently involved in 13 oil and gas upstream projects across eight countries, including six blocks under production, such as Block 17-03 in China and Block 15-1 in Vietnam. The 13 projects also comprise three LNG ones, such as Oman LNG and Qatar's Ras Laffan LNG.

The company has recently adopted a strategy to concentrate its upstream business efforts in the Asian region, moving away from remote markets like the US and Peru, as part of "business reorganization strategy focused on decarbonization."

SK Earthon has led a group of South Korean companies for the Shepherd CCS project in Malaysia, which launched in August 2022 in a consortium that also consists of Malaysia's state-run oil company Petronas.

The Shepherd project aims to capture CO2 emitted from industrial sites in South Korea and collect it in local carbon capture plants before transporting it to Malaysia for onshore or offshore storage.

"SK Earthon aims to secure carbon capture and storage capacity of 2 million mt by 2030, 5 million mt by 2040 and 16 million mt by 2050," the release said.