SK unit buys stakes in LNG customers in China
SK E&S agreed to acquire 30 percent stakes in affiliates of Beijing Gas Blue Sky Holdings to broaden its clientele for liquefied natural gas (LNG) overseas, confirmed the energy and chemical subsidiary of SK Group on Friday.
SK E&S HongKong, a subsidiary based in Hong Kong, is purchasing 30 percent stakes in Ningbo Beilun Bochen Energy Trading, Huzhou Bochen Natural Gas and Zhejiang Boxin Energy for around 22 billion won ($19.64 million) in total.
SK E&S, a subsidiary of SK Holdings, operates all along the LNG value chain, from upstream gas production to midstream LNG liquefaction, storage and regasification, downstream power generation and city gas distribution.
The goal behind the share purchases is to lock in LNG customers in China, according to Ko Him-chan, a spokesperson for SK E&S. SK E&S plans to sell between 200,000 tonnes and 300,000 tonnes of LNG to Beijing Gas Blue Sky Holdings through its Hong Kong-based subsidiary.
In April, SK E&S sold its 10.25 percent stakes in China Gas Holdings, which was valued at around 1.8 trillion won.
China has seen major growth in LNG purchases in recent years due to its rapid urbanization. But use could be down this year due to the impact of Covid-19.
ICIS, an information provider to energy and petrochemical markets, predicted in April that LNG demand from the world’s largest importers — China, Japan and Korea — will fall this year.
Data showed Chinese imports will fall to 58.1 million tonnes in 2020, down 5.2 percent on year, and Japan's will fall by 1.1 percent on year to 76.2 million tonnes. Korea is projected to see a 4.7 percent decline in LNG imports to 38.5 million tonnes during the same period.
BY KANG KI-HEON, JIN MIN-JI [email@example.com]