WOODFORD, Oklahoma – A shale gas field in Woodford, Carter County, in Oklahoma was bustling with activity on Feb. 25.
A team of engineers oversaw the drilling of the site’s 209th gas well, deploying steel tubing through a 30-meter-high derrick to tap into the underground reserves. With each drill descending 100 to 200 meters per day, a single well could provide natural gas for decades.
“We started investing in shale gas fields a decade ago. We are now shipping one million tons of liquefied natural gas to South Korea annually,” an SK Innovation E&S (SKI E&S) official told The Korea Economic Daily. “Given the strong competitiveness of US LNG, we are reviewing additional (gas field) acquisitions.”
A new gold rush, or energy rush rather, is underway in the US, as Donald Trump’s return to the White House signals a renewed focus on fossil fuels.
South Korea’s SK Group is among those doubling down on US natural gas assets, seeking to seize the opportunity to secure supplies amid growing global demand.
The Trump administration is expected to accelerate fossil fuel expansion, with LNG emerging as a key pillar of energy security, particularly in the wake of the war in Ukraine. With US authorities viewing LNG as a solution to AI-driven power shortages, the sector is poised for another boom, analysts said.
A NEW GODL RUSH IN FOSSIL FUELS
SKI E&S, the natural gas business unit of SK Innovation Co., and its US partner Continental Resources Inc., one of the largest US oil and gas developers, are seeking to expand their gas field holdings.
Sources said SKI E&S plans an equity investment in new gas fields.
Having committed $360 million to acquire a 49.9% stake in the Woodford shale field in 2014 – while Continental Resources retained the remaining 50.1% – SKI E&S secures one million tons of LNG from the site each year, covering about 2.2% of Korea’s 2024 LNG imports of 46.33 million tons.
Should the additional investment proceed as planned, SKI E&S will be able to secure 10 million tons of LNG a year by 2030 – a more than fourfold increase from its current 2.3 million tons, which includes 1.3 million tons from its Barossa gas field off Australia.
Industry sources said SK’s expanding LNG imports is likely to support its upcoming power projects, including an LNG-fired power plant set to operate in 2027 for its semiconductor affiliate SK Hynix Inc. at the semiconductor cluster in Yongin, south of Seoul.
“SK securing more LNG than its domestic needs suggests it is looking to enter the global LNG trading market in full swing,” said an industry official.
Formerly SK E&S, SKI E&S is a company created through a merger last November with SK Innovation, the parent of Korea’s largest oil refiner SK Energy Co. and battery maker SK On Co.
According to Shell plc, a British multinational oil and gas company, global LNG demand is forecast to climb to 718 million tons by 2040 from 404 million tons in 2023, which represents an average annual growth rate of 4.5%, surpassing previous estimates.
OTHER KOREAN ENERGY FIRMS FOLLOW SUIT
Other Korean energy firms are also ramping up their involvements in US shale gas development and imports, attracted by the cost advantages of US LNG, which is 20–30% cheaper than Middle Eastern alternatives.
State-run Korea Gas Corp. (KOGAS) is accelerating its push for US LNG imports as its long-term contracts with Middle Eastern suppliers have expired or are set to expire.
Deals covering 9 million tons of LNG from the Middle East – 4.9 million tons from Qatar and 4.1 million tons from Oman – equivalent to 19.4% of its total imports lapsed at the end of 2024.
KOGAS is now in discussions with US energy firms to finalize new supply contracts by the end of this year.
Private sector players are following suit.
POSCO International Corp. is balancing short-term LNG purchases with a strategic long-term procurement from the US.
The company has already inked a 20-year agreement with Texas-based Mexico Pacific, under which it will import 700,000 tons of LNG a year from Texas.
GS Energy Corp. is also known to be weighing similar investments in the US.
KOREA EYES CHEAPER CANADIAN CRUDE
Beyond LNG, Korean energy firms are also considering increasing imports of Canadian crude oil, which is priced at 10-20% lower than Dubai crude.
With the US government imposing a 10% tariff on Canadian crude starting March 4, which will likely lead to reduced shipments to the US, Korean firms see an opportunity to redirect supplies.
SK Energy recently completed tests confirming the compatibility of Canadian oil with its refining facilities. It is in negotiations with Canadian suppliers for spot purchases, sources said.
“We found no significant difference between Canadian and Dubai crude,” said an SK Energy official. “We are ready to move forward with imports of Canadian crude.”
GS Caltex Corp. and HD Hyundai Oilbank Co. are also exploring Canadian crude purchases.
Last September, GS Caltex jointly purchased 300,000 barrels of Canadian crude with its Japanese partner ENEOS Corp. on a trial basis. GS acquired the oil at a $5 to $6 per barrel discount to Brent crude.
HD Hyundai Oilbank is currently assessing options for a Canadian crude purchase.
By Woo-Sub Kim, Hyung-Kyu Kim and Jin-Won Kim
duter@hankyung.com
In-Soo Nam edited this article.
