SK Innovation is expanding its cooperation with U.S. nuclear power company TerraPower on the next-generation small modular reactor (SMR) “Natrium.” The company plans to directly participate in demonstration and commercial projects underway in the United States and, in Korea, to review the feasibility of building a Korean-style business model, “K-Natrium,” and a supply chain, with the aim of targeting large-scale power demand markets such as AI data centers.

SK Innovation announced on the 14th that its CEO Choo Hyeong-wook and TerraPower CEO Chris Levesque met in Seoul and signed a term sheet setting out key conditions for business cooperation on the Natrium SMR and for entering global markets.

SK Innovation and SK jointly invested a total of USD 250 million (approximately KRW 353.4 billion) in TerraPower in 2022, becoming the second-largest shareholder. On the back of this agreement, the two sides will broaden the scope of cooperation from remaining a simple financial investor to directly participating in SMR business development and project execution.

The term sheet includes SK Innovation’s expanded participation in TerraPower’s Natrium SMR demonstration plant and subsequent commercial projects in the U.S., utilization of Korea’s SMR supply chain, development of a domestic Natrium SMR business, and joint identification of global projects.

The two companies plan to jointly review nuclear regulatory regimes, industrial environments, and power system conditions in each country and, step by step, establish specific implementation directions for “K-Natrium,” the Korean-style Natrium SMR business model.

They are also considering linkages with Korea’s nuclear power industry. They intend to review ways to utilize the core equipment supply chain so that domestic research and design institutions and nuclear power and power generation equipment companies can participate in the Natrium SMR business, and to assess whether a Korean-style design and project execution framework can be established.

SK Group Chairman Chey Tae-won and TerraPower Board Chair Bill Gates also attended a dinner held after the meeting of the two companies’ management on the same day. The two sides discussed responses to rising power demand due to the increase in AI data centers, development directions for the next-generation nuclear power industry, and potential Korea–U.S. nuclear cooperation.

Expanded participation in the Kemmerer project in the U.S.… building design and construction experience

SK Innovation plans to expand its participation in TerraPower’s Natrium SMR project “Kemmerer Unit 1” in Wyoming, U.S., as well as in subsequent commercial projects.

Kemmerer Unit 1 is a project that applies TerraPower’s Generation IV sodium-cooled fast reactor (SFR) technology. By participating in the U.S. project, SK Innovation plans to gain experience in the design, construction, and operation of next-generation nuclear power plants and use that experience in reviewing future domestic projects and developing overseas projects.

The pool of candidate regions for global projects will also be expanded. The company intends to explore the potential for SMR development and operation projects in Asia, including Vietnam, Indonesia, and Malaysia, as well as in Korea and the United States.

The two sides will also jointly pursue additional projects in the U.S. that can be linked to policy and financial support from the Korean and U.S. governments. For each individual project, they will review business feasibility, financing structures, supply chain composition, and construction and operation plans, and examine the potential for cooperation with the U.S. government and related institutions.

Natrium SMRs are reactors that combine a sodium-cooled fast reactor using liquid sodium instead of water as a coolant with a molten-salt-based thermal energy storage system.

The reactors store the heat they generate and then release it during periods of high electricity demand, allowing both stable power production and load-following operation. TerraPower is developing this as a next-generation power source that can be applied to facilities with high electricity consumption, such as AI data centers, semiconductor plants, and industrial complexes.

From LNG and ESS to SMRs… expanding power supply chains for AI data centers

SK Innovation is also linking this cooperation with its electrification strategy.

SK Innovation has capabilities in direct LNG procurement, LNG power generation, and power businesses, and is also expanding its battery and energy storage system (ESS) businesses through SK On. By adding TerraPower’s SMR technology and related business development capabilities, the company plans to promote an integrated energy business that bundles LNG, electricity, ESS, and SMRs.

The business concept focuses on AI data centers and industrial complexes where electricity demand is surging. In the short term, it aims to meet initial power demand with LNG power generation and ESS, and in the medium to long term, to supply SMRs as a stable, carbon-free power source.

There is also potential to link this with SK Group’s internal AI businesses. By connecting SK hynix’s AI semiconductors, SK Telecom’s data center and AI infrastructure, SK Innovation’s LNG, power, and SMRs, and SK On’s ESS, the group expects to integrate its businesses from semiconductors to power and storage systems required for data center operations.

SK Innovation CEO Choo Hyeong-wook said, “This agreement is meaningful in that it involves jointly reviewing the feasibility of applying Natrium SMRs in Korea to meet AI data center power demand and cooperating to expand global operations,” adding, “SK Innovation will specify the implementation direction of the K-Natrium business model, secure business development and operational capabilities through participation in U.S. projects, and thereby expand its entry into global markets.”

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