South Korean oil refining company SK Innovation and its energy affiliate SK E&S have agreed to merge, creating an energy company with assets totaling KRW 100 trillion ($72.5 billion). This merger positions the new entity as the largest private energy company in the Asia-Pacific region, addressing the challenges posed by economic downturns, sector uncertainties, and gaps in the electric vehicle market. The merger aims to create synergies in three main areas: enhancing portfolio competitiveness, strengthening financial and profit frameworks, and ensuring sustained growth momentum.

Established in 1962, SK Innovation has evolved from South Korea’s first Stolthaven Terminals, in collaboration with Global Energy Storage (GES), has been chosen as the sole 'potential operator' responsible for the planning, design, construction, and operation of a green ammonia terminal in Pecém, Ceará, Brazil.

The Port of Pecém Authority, known as CIPP, granted rights to the partnership between Stolthaven Terminals and GES following a 15-month tender process that included various global storage providers. In the next project phase, basic engineering of the terminal will be developed with input from CIPP and ammonia producers, leading to the finalization of the official contract with CIPP.

The establishment of a green ammonia terminal in the Industrial Export Zone (ZPE) of the Pecém Complex will support the production and export of green hydrogen and ammonia, providing offshore markets with access to one of the world's most competitive sources of renewable energy.

In 2023, Stolthaven Terminals and GES forged a partnership to establish and manage an export terminal for hydrogen and its derivatives. Both companies are prominent providers of storage solutions for bulk liquids and gases, boasting global operations and extensive experience in executing complex, large-scale storage projects. Stolthaven Terminals has a longstanding presence in Brazil, operating for 42 years in the Port of Santos and earning multiple customer awards for its adept handling of biofuels and specialty chemicals.

Green ammonia is increasingly considered for decarbonizing the shipping industry and cutting greenhouse gas emissions in power and heat generation. It shows promise as a hydrogen carrier for long distances due to its ease of liquefaction and higher hydrogen density compared to other low-carbon alternatives. Ammonia is anticipated to play a crucial role in achieving the EU's goal of importing 10 million tonnes per year of renewable hydrogen by 2030, with a substantial portion expected to be imported into Europe.

"I extend my gratitude to CIPP for selecting Stolthaven Terminals and our partner, GES, for this tender. We eagerly anticipate collaborating with GES, CIPP, and prospective customers in crafting a world-class terminal that will play a crucial role in the energy transition." - Guy Bessant, President of Stolthaven Terminals.

Peter Vucins, CEO of GES, remarked, "We are pleased with our contribution to this initiative. Our collaboration with Stolthaven Terminals has led to the development of an excellent solution for the Port of Pecém, aligning with our vision and operational approach across global assets."

Marcelo Schmitt, General Manager of Stolthaven Santos, stated, "We are honored to be selected by CIPP as their partner for the Hydrogen Hub. This marks another milestone in our growth strategy and reinforces our commitment to assisting customers in their transition to sustainable energy. Brazil is emerging as a key player in biofuels and renewable energies exports, and our extensive local and global experience, combined with GES's expertise, will ensure the success of this transformative project in the storage industry."company into a diversified entity involved in petrochemicals, lubricants, oil exploration, and future energy sectors. SK E&S, spun off from SK Innovation in 1999, has become South Korea’s leading private liquefied natural gas (LNG) company and is transitioning towards a greener portfolio.

The merged company's portfolio will encompass a wide range of energy sources and solutions, including ammonia, batteries, chemicals, city gas, hydrogen, immersion cooling, LNG, oil, power, and renewable energy. At the same time, SK On, a subsidiary of SK Innovation, will consolidate with SK Trading International and SK Entercom to strengthen competitiveness in raw materials and secure long-term business viability.

SK Innovation CEO and President Park Sang-kyu commented, "The merger of these two companies marks a structural and fundamental innovation aimed at achieving sustainable growth by actively adapting to the evolving energy industry landscape. Through this merger, SK Innovation will grow into a ‘Total Energy & Solution Company’ that leads Korea’s energy industry from the present into the future.”

SK E&S CEO and President Choo Hyeong-wook remarked, "This merger will bolster the current business strengths of both entities while also establishing growth catalysts for pivotal future energy ventures. Leveraging synergies from the merger, SK E&S will advance its green portfolio focused on its four core sectors and take the lead in shaping the future energy market."

In a related update, Posco International has recently finalized the construction of South Korea's inaugural privately-operated LNG terminal, Gwangyang LNG Terminal 1, marking a significant expansion of the nation's LNG infrastructure.

SK Innovation Co., Ltd. serves as an intermediate holding company within the SK Group, specializing in petroleum, alternative energy, and oil exploration. It operates via eight primary subsidiaries: SK Energy, SK Geo Centric, SK On, SK Enmove, SK Incheon Petrochem, SK Trading International, SK IE Technology, and SK Earthon. SK Energy was formed in 2007 when South Korea's leading refiner, SK Corporation, was split into two entities: an energy operation (SK Energy) and a holding company (SK Holdings). SK Energy took over the energy and chemical businesses, while SK Holdings focused on investing in subsidiaries and the life sciences sector.