UPDATE 1-SK Energy close to battery deal with Mitsubishi Fuso

* SK Energy in final stages of talks to supply batteries

* To decide on location, production when deal signed

* Shares up 2.04 pct, outperform broader market

(Adds share price, details and background throughout)

SEOUL, Oct 8 (Reuters) - South Korea's SK Energy (096770.KS) is in the final stages of talks to supply rechargeable batteries to Daimler's (DAIGn.DE) Japanese truck unit, Mitsubishi Fuso, a source at SK Energy said on Thursday.

"The possibility of reaching the deal is more than 90 percent," said the source at South Korea's top oil refiner, declining to be identified due to the sensitivity of the matter.

Mitsubishi Fuso is the world's largest commercial vehicle maker in which Daimler holds an 85-percent stake. The remainder is being held by the Mitsubishi group companies, according to Mitsubishi Fuso's web site (www.mitsubishi-fuso.com).

SK Energy, South Korea's top oil refiner, has been testing mass production lithium-ion batteries for hybrid electric vehicles, helping its shares spike by nearly 30 percent in the past one month.

According to company officials, it will decide on the location and scale of production when it inks a deal with an automaker [ID:nSEO357428]. A company source has said last month that SK Energy was close to a deal to supply batteries to an European automaker. [ID:nSEO334233]

Should the deal be finalised, it will be the fourth rechargeable battery supply project by South Korean firms.

South Korea's top chemical maker LG Chem's (051910.KS) U.S. unit will supply next-generation lithium-ion batteries for General Motors' [GM.UL] Volt plug-in.

Separately, LG Chem and Hyundai Mobis Co (012330.KS), the car-parts making unit of Hyundai Motor Group, plans to set up a battery joint venture to develop and produce lithium-ion battery packs for hybrid cars.[ID:nSEO332545]

Another South Korean rechargeable battery maker, Samsung SDI Co (006400.KS), has teamed up with Germany's Robert Bosch [ROBG.UL] and operates a car battery venture which will supply lithium-ion battery cells for BMW's (BMWG.DE) Megacity project. [ID:nL3141522]

SK Energy shares rose 2.04 percent to close 125,000 won on Thursday, outperforming the broader market.

(Reporting by Cho Meeyoung; Editing by Valerie Lee)