Aspiration for an energy leader Turned into American dream..

SK is further diversifying its energy spectrum in the United States. First in line is shale. Shale is a clastic sedimentary rock distributed in thin and wide layers at 2~4km underground and it contains oil and gas that can be mined when shale is broken by spraying high-pressure water containing sand and chemical substances. Pumping oil and gas from shale used to be regarded as impossible, but as viable shale oil and gas mining solutions are now available, shale oil and gas production output is rising steadily.

 

 

Shale oil and gas can be produced by: directly operating shale oil or gas mines; or acquiring equities of shale mines already in operation and buying gas produced from such mines. SK E&P, a subsidiary of SK innovation, is opening shale mines in the United States. SK is the only business group of Korea that directly operates overseas shale mines.
SK E&S acquired equities in Woodford shale gas mine in Oklahoma from Continental Resources of the USA to develop a shale gas business whereas SK holdings is expanding its reach to become a global energy investor by investing in G&P (gathering & processing) enterprises like Eureka, Brazos, and Blue Racer, all midstream operators, which are growing rapidly taking advantage of the expanding shale gas market momentum in North America.

 

 

Complete LNG value chain from production to distribution and consumption

 

 

SK E&S succeeded in concluding the first North American shale gas purchase agreement in September, 2013 among Korean private enterprises. When a LNG liquefaction terminal being constructed by the US Freeport LNG in Freeport, Texas is completed in 2020, SK E&S will liquefy and import 2.2 million tons of North American shale gas a year from the LNG terminal to Korea until 2039. SK E&S is the only Korean private enterprise that has completed the LNG value chain covering LNG production, shipping and distribution under the vision of ‘Global Clean Energy & Solution Provider’.

 

 

Producing shale gas and oil in the United States for the first time SK innovation produces approximately 6,000 BOE (barrel of oil equivalent) of shale gas and oil a day in the United States, fulfilling its ‘American Dream’. SK innovation incorporated SK Plymouth in 2014 and acquired 75% of the equities of Grant/Garfield County production mine in Oklahoma and 50% of the equities of Crane County production mine in Texas.

 

 

SK innovation also acquired the entire shares of Longfellow, a US shale developer, in March, 2018, adding the Nemaha production mine to its shale portfolio. The Nemaha production mine is located in Stack, an area being highlighted as a thriving shale oil development community in the United States, just 40km far from the Grant/Garfield production mine, resulting in a promising synergy effect. SK innovation even relocated its E&P business headquarters to Houston, Texas in 2017 in line with the determination of Chairman Chey Tae-won who believes, “if we are serious about it, we must be present in the United States, home to oil development.”

 

 

Building an outpost for the EV battery business in the United States

Second in line carrying the SK name in the United States is EV battery, SK’s new energy business. SK innovation held a ground-breaking ceremony of an EV battery production plant construction project in Commerce, Georgia in March this year. This EV battery plant marks the first direct investment initiative made by SK innovation in the United States and is expected to be a crucial beachhead upon its completion. The US market is one of the most hotly contested EV markets around the world.

 

 

The state of Georgia which lies in the southeastern part of the United States is rising rapidly as a manufacturing hub. Not only leading US corporations such as Lockheed Martin but also global big names including Tata Group of India are located there. In particular, Georgia is home to production bases of global automotive makers including Volkswagen, BMW, Daimler Benz, Volvo, Hyundai-KIA Motors, and others and regarded as an optimum site for EV battery plants given its growth potential enabled by the proximity of automotive production bases.

 

SK’s EV battery plant is scheduled for completion sometime in the second half of 2021 and to start commercial production early 2022 after going through facility stabilization, commissioning, and product certification phases. Upon completion of the plant, SK innovation’s US production capacity will more than double its Seosan plant throughput (4.7GWh per year), surpassing any other Korean EV battery vendors operating in the North American market.

 

Meanwhile, SK siltron decided to acquire the SiC wafer division of the US DuPont producing power semiconductor wafers for EV application on September 10, 2019. The power semiconductor wafer produced by DuPont is known to withstand extreme voltages and temperatures and thus deliver 20% or more energy efficiency than conventional silicon wafers. This recent acquisition has further upgraded SK’s EV business portfolio now consisting of SK innovation producing EV batteries, SKC acquiring the world’s biggest EV battery copper foil vendor, and SK siltron manufacturing EV power semiconductor wafers.

 

 

SKC’s chemical solutions captivate the US market

 

 

SKC inc., a US SKC subsidiary, has captivated the US market with its high-value, eco-friendly ‘EcolabelTM’. Ecolabel is a 100% recyclable heat-shrink film attached to the outer surface of PET bottles which can recycle together thus conducive to reducing environmental issues resulting from waste incineration and burial. Ecolabel is expected to grow at an annual rate of 10~15% in the US market which is already showing a positive response to the solution, with the global soft drink brand keenly considering its use. Early this year, the excellence of a product using SKC’s Ecolabel for the first time was recognized by the US Association of Plastic Recyclers (APR). In the meantime, MCNS, a joint venture between Mitsui Chemicals and SKC Polyurethanes Inc. built a system house in Georgia, producing a polyurethane material (system polyol) customized to client’s requirements in a bid to beef up business competitiveness through a win-win strategy.

 

SK Chemicals America, Inc., a US subsidiary of SK chemicals, distributes SKYGREEN, a BPA-free copolyester material and ECOZEN which is the world’s first biomass-based material solution. In spite of the tough market landscape where these products need to compete with several local products, they are positively rated by US customers across a range of industrial sectors for their well-balanced chemical-resistance, transparency, moldability, and environment-friendliness. Major applications include food and beauty product containers. These products are supplied to leading retailers such as Walmart, Home Depot, Target as well as hospitals and schools as an eco-friendly interior finishing solution, and are adopted by medical packaging industry leaders. Furthermore, a range of coating agents, adhesives, and engineering plastic products like SKYBON that features excellent bonding performance and elasticity as coating agent of steel sheet and beverage cans, SKYPEL and SKYPURA which are thermoplastic elastomers are also distributed in the US market.

 

SK’s aspiration for turning into an energy leader is materializing sustainable renewable energy development initiatives far away in the United States From petrochemical and shale to EV battery, SK’s global energy paradigm building initiative is ongoing.