SK E&S, the energy unit of South Korea’s SK Group, has shipped its first cargo of liquefied natural gas (LNG) from the Barossa gas field off the coast of northern Australia, marking a significant milestone in the company’s long-term overseas resource development strategy. The shipment, completed on January 27, 2026, is the culmination of more than a decade of planning, investment, and engineering, and it represents a rare success story for a South Korean private company advancing an overseas gas project from the earliest exploration phase through to full LNG production, according to SK E&S and SK Innovation E&S announcements cited by The Korea Economic Daily and The Korea Herald.
The Barossa project, with a total investment of approximately $1.6 billion, is located about 300 kilometers offshore from Australia’s northwest coast. SK E&S holds a 37.5% stake in the venture, having joined the project in 2012. The field is operated by Australia’s Santos Corp., which owns 50%, while Japan’s JERA holds the remaining 12.5%. The three partners jointly undertook reserve appraisal, navigated regulatory approvals, and oversaw the construction of both offshore and onshore facilities necessary to bring the project to fruition.
The gas extracted from the Barossa field is transported to the Darwin LNG terminal, where it is processed and liquefied before being loaded onto LNG carriers. Notably, the project employed a brownfield development strategy, utilizing and refurbishing the existing Darwin LNG terminal rather than building a new one. This approach, as described by SK E&S officials, significantly reduced capital expenditure and helped shorten the path to production. It also improved cost competitiveness by reducing shipping times to South Korea to about 10 days—a logistical advantage that could prove crucial in a volatile energy market.
SK E&S expects to secure around 1.3 million metric tons of LNG annually from Barossa over the next 20 years. This volume is equivalent to roughly 3% of South Korea’s total annual LNG imports, providing a stable resource base for domestic power generation. The company has also indicated that, over time, the imported LNG could serve as feedstock for hydrogen production after carbon removal, aligning with broader energy transition goals.
For South Korea, the successful launch of LNG shipments from Barossa arrives at a time of heightened volatility in global gas markets, with energy security and long-term supply stability top of mind for both policymakers and industry leaders. By securing a steady stream of LNG outside the often unpredictable spot market, SK E&S is positioning itself—and, by extension, South Korea—to better weather fluctuations in supply and demand.
Lee Jong-soo, president of SK Innovation E&S, highlighted the broader significance of the achievement. In a statement reported by The Korea Herald, he said, "The first LNG production from Barossa demonstrates the results of a long-term, private-sector-led commitment to overseas resource development." He added, "The company plans to further strengthen its business foundation while contributing to stable energy supply and national energy security through continued LNG production."
The Barossa project’s journey has not been a short one. SK E&S first joined the initiative in 2012, and the intervening years have seen the company and its partners navigate a host of technical, regulatory, and financial challenges. The joint investment of $1.6 billion covered everything from initial reserve appraisal to the construction of state-of-the-art offshore platforms and the refurbishment of the Darwin LNG terminal. This long-gestation effort, which spanned 14 years from SK E&S’s perspective, underscores the complexity and risk involved in bringing a major energy project online—especially in a sector as capital-intensive and geopolitically sensitive as LNG.
According to SK E&S, the use of existing infrastructure in Darwin was a key factor in keeping costs down and accelerating the project’s timeline. Rather than building a new terminal from scratch, the partners opted to upgrade the already operational Darwin LNG terminal, which is located conveniently close to the Barossa field. This brownfield strategy not only minimized environmental impact and capital expenditure but also allowed the first shipment to take place sooner than might have been possible with a greenfield approach.
As global energy markets continue to grapple with supply chain disruptions, shifting demand patterns, and the ongoing transition toward lower-carbon fuels, the Barossa project offers a glimpse into how established players are adapting. By locking in long-term LNG volumes, SK E&S is reducing its reliance on volatile spot markets. This move is widely seen as a hedge against future price spikes and supply shortages, which have become more common in recent years due to geopolitical tensions and climate-related disruptions.
The LNG produced from Barossa is slated primarily for use in South Korea’s domestic power generation sector, providing a cleaner-burning alternative to coal and oil. In the longer term, SK E&S has signaled its intention to leverage the imported LNG as a feedstock for hydrogen production, once carbon emissions are removed—a step in line with South Korea’s broader ambitions to decarbonize its energy mix and become a leader in the emerging hydrogen economy.
Industry analysts note that the successful launch of Barossa’s LNG exports could inspire other South Korean private companies to pursue similar overseas resource development projects. The combination of stable, long-term supply contracts and cost-effective infrastructure investments is likely to be increasingly attractive as the country seeks to diversify its energy sources and enhance security of supply.
Reflecting on the broader implications, SK E&S officials emphasized the project’s role in strengthening South Korea’s energy security. The company stated that the long-term LNG supply from Barossa is expected to contribute significantly to a stable resource base, providing a buffer against the unpredictable swings of the global energy market. This sentiment was echoed in Lee Jong-soo’s remarks, as he pointed to the company’s commitment to ongoing LNG production and its contribution to both business growth and national interests.
With the first shipment now complete and a steady stream of LNG expected for the next two decades, SK E&S and its partners are already looking ahead. The focus will remain on maximizing operational efficiency, ensuring environmental compliance, and exploring new opportunities for value creation—especially in areas like hydrogen production, which could further cement the project’s role in South Korea’s energy future.
For now, though, the successful launch of LNG shipments from Australia’s Barossa field stands as a testament to the power of persistence, partnership, and strategic investment. It’s a development that not only marks a major achievement for SK E&S, but also signals a new chapter in South Korea’s ongoing quest for energy security and sustainability.