South Korean refiner SK Energy has announced plans to spin off its crude oil storage and maritime shipping business to form a wholly-owned SK Innovation subsidiary.
The subsidiary will be tentatively named SK Tank Terminal and is set to officially launch on 1 January 2024. SK Energy is also an SK Innovation subsidiary.
SK Tank Terminal stores and ships crude oil and petrochemical products, and has storage tanks at SK Energy's 800,000 b/d Ulsan refinery as well as dock facilities. The new entity plans to provide storage facilities to external customers, and expand its business into storing and shipping low-carbon products such as sustainable aviation fuel (SAF).
SK Innovation hopes the spin-off will bolster operational competitiveness and capitalise on new business opportunities, by responding to growing demand for low-carbon products. Its decision is also in line with the conglomerate's recent plans to secure feedstock for SAF production.
SK Innovation's trading arm SK Trading International in October embarked on a takeover of the country's largest waste-based feedstock supplier Daekyung O&T. SK Trading International, through the investment, seeks to secure waste feedstock such as UCO, tallow and palm oil mill effluent (Pome) oil for SAF production. Daekyung O&T supplies approximately 60-70pc of tallow and 40-50pc of UCO found in the country and can supply around 200,000 t/yr of waste feedstock, market participants said. SK Trading International also invested in Chinese UCO company Sichuan Jinshang Environmental Technology earlier this year.
