SK Gas delays $1 bn combined cycle power plant operation

SK Gas Ltd., South Korea’s No. 1 liquefied petroleum gas (LPG) distributor, has postponed the commercial operation of its combined cycle power plant in Ulsan that can use both LPG and liquefied natural gas (LNG) as fuel.

According to energy industry sources on Monday, SK has decided to extend its test operation period to ensure its safety.

SK Gas has invested 1.4 trillion won ($1.02 billion) to build the power plant, the Ulsan GPS, in South Gyeongsang Province, since March 2022.

The power plant has a capacity of 1.2 gigawatts (GW). Test operations began last May.

If the plant successfully begins commercial operation, it will become the world's first gas combined cycle power plant with a gigawatt capacity, capable of supplying electricity to 2.8 million households annually.

"Since we are operating the world’s first dual-fuel LNG and LPG power plant, we have pushed back the date [of commercial operation] to ensure its safety through additional operational checks and preparations," explained an SK Gas official.

He added that more time will be required for test operations and operational assessments than it had spent to test its existing power plants.

Yoo Jae-sun, an analyst at Hana Financial Investment, said that the revenue from Ulsan GPS will be reflected into SK Gas from the fourth quarter.

Write to Hyeon-woo Oh at ohw@hankyung.com