SK E&S unit, Paju Energy Service, has started commercial operation of its 1,800 MW LNG power plant in Paju in Gyeonggi Province, Korea.
This operation follows SK E&S’ import of 66,000 tons of U.S. shale gas from Cheniere’s Sabine Pass LNG terminal in Louisiana, making the company the first to import U.S. shale gas into Korea.
The facility is a combined thermal power plant consisting of two 900 MW units capable of producing 2 percent of South Korea’s total generation capacity. Combined with the Gwangyang LNG power plant’s current capacity of 1,126 MW, SK E&S increased its total production capacity to 3,000 MW.
According to the SK E&S statement, the Paju LNG power plant will directly-imported shale gas which is expected to reduce the price of electricity.
SK E&S is the first private generator to directly import fuel from the overseas market, the statement reads. Since 2005 the company has imported 500,000~600,000 tons of natural gas annually from the Tangguh LNG project in Indonesia, providing fuel for the Gwangyang LNG power plant.
Aside from deals in the spot market, such as with Sabine Pass LNG Terminal, SK E&S plans to import natural gas based on mid-and long-term contracts.
As part of this plan, SK E&S will, starting this year, import 800,000 tons of natural gas per year from the Gorgon LNG project in Australia for five years, and receive 2.2 million tons from Freeport LNG terminal in the U.S. over 20 years, beginning in 2019.
Some of the fuel from Freeport would be provided to SK E&S’s power plants, including the Paju LNG power plant and the Wirye CHP plant, the company said in its statement.