Korea Eximbank provides $330m loan for Australian gas project
The Export-Import Bank of Korea (Korea Eximbank) has finally decided to grant a loan of 330 million dollars to an SK E&S consortium promoting a gas field project in Australia.
The bank made the loan decision at a credit review committee on May 31.
SK E&S is participating in a project to develop a gas field in Barossa, located in the Bonaparte Basin of the Timor Sea off the coast of Australia, with the Australian Santos and the Japanese energy company JERA. If the project goes as planned, about 1 million tons of liquefied natural gas (LNG) per year can be introduced into Korea from 2025. It can be used for the production of blue hydrogen and other purposes.
The Korean government decided to financially support the Barossa project last year. The Korea Trade Insurance Corp. decided late last year to provide financial support worth $330 million. However, opposition from environmental groups forced Korea Eximbank to delay its decision. Earlier in March, residents of Tiwi Island in northern Australia and the Lalakia people filed a lawsuit in Seoul Central District Court against Korea Eximbank and Korea Trade Insurance Corp, demanding both companies stop lending to the Barossa project.
However, as the new Korean government is determined to support overseas resource development projects of private companies, the mood has changed.
The lawsuit brought by the Aboriginal Australians was recently dismissed by the court, reducing Korea Eximbank’s charge. “Even if the court prohibits public financial support for the Barossa project, companies can still promote the project by raising funds in other ways,” the Seoul Central District Court said, dismissing the lawsuit.
SK E&S plans to develop the gas field in an environmentally friendly way. The gas field is expected to emit 3.5 million tons of carbon dioxide per year. SK E&S plans to eliminate 2 million tonnes of emissions through carbon capture technology and offset the remaining 1.5 million tonnes through carbon credit purchases or reforestation projects.
The decision to provide financial support for the Barossa project is expected to stimulate the development of private sector resources overseas.