Dear Stakeholders,

2023 has been a significant year for SK Gas, marked by innovation and growth. Despite the uncertain internal and external business environment, we have diligently prepared new ventures to transition our business portfolio to a “Net Zero Solution Provider.” Financially, we achieved excellent results once again, following the successes of 2021 and 2022.

In our existing LPG business, we responded to new transportation demand by successfully launching a 1-ton truck. The fuel conversion and trading businesses for industrial sectors also demonstrated stable performance. Our concerted efforts in the EPC phase of the Ulsan GPS and KET (Korea Energy Terminal) LNG terminal culminated in significant milestones. As a result, in April 2024, we will commence the trial operation of the world’s first LNG-LPG Dual Fuel power plant, Ulsan GPS, laying the foundation for a transition to low-carbon energy The Ulsan GPS plant, utilizing the latest turbine models, seeks both efficiency and eco-friendliness. By flexibly operating LNG and LPG gas fuels, it can secure additional competitiveness. This foundation will support our future business expansion into hydrogen and other zero-carbon energy sources.

To acquire essential capabilities for future eco-friendly businesses, we decided to enter the U.S. Energy Storage System (ESS) market in January 2024 as a new business. In January 2024, we established a joint venture, GridFlex Inc., with SK Eternix co., Ltd., and are collaborating with Apex Clean Energy to develop a 200MW ESS facilities in Texas. Through this, we plan to expand from gas trading to power trading, from Korea to the United States, and into the renewable energy business, taking one step closer to our vision of becoming a “Net Zero Solution Provider.”

In the ESG domain, we successfully completed ESG Master Plan 1.0 (2021-2023) and are formulating ESG Master Plan 2.0 (2024-2026) to build global-level management systems in the environmental (E), social (S), and governance (G) sectors. Particularly, we conducted human rights impact assessments on stakeholders (headquarters/ terminals/subsidiaries/partners), to identify and address key issues. The publication of our human rights management report transparently outlines these issues and our response tasks. Additionally, to achieve carbon neutrality, we are promoting the longterm procurement renewable energy power through Power Purchase Agreements (PPAs) and continuously reviewing the feasibility of our greenhouse gas reduction plans and implementation measures to achieve Net Zero by 2030.

In 2023, our efforts were externally recognized, earning Morgan Stanley Capital International (MSCI) “AAA,” Korea Institute of Corporate Governance and Sustainability (KCGS) overall “A+,” and Carbon Disclosure Project (CDP) “Leadership A” ratings. We also received the “Energy & Utilities Sector Carbon Management Sector Honors” at the CDP Korea Awards.

2024 is an important period as we begin the second phase of our future growth strategy (SWAN 2.0) through the full-scale development and operation of new businesses. Internally, we aim to foster sustainable growth through the internalization of ESG management, and to take it to the next level as a “Net Zero Solution Provider” that we have ultimately dreamed of through the implementation of the Lower Carbon business based on the stable commercial operation of Ulsan GPS.

This year marks the 5th anniversary of SK Gas’s sustainability report. We remain committed to not only maintaining our leadership in the LPG sector but also transitioning into LNG and hydrogen businesses, paving the way for a clean energy future. By taking systematic, incremental steps, we believe meaningful change is achievable. We appreciate your continued interest and support.

Thank you.

CEO of SK Gas Byung Suk Yoon