This was a technique Stevan Hird and I came up with back on Hobbit. Brian Hapgood did the code to get this working in Unreal. The idea is to keep your overall sky textures small and make your skybox out of small elements. The hills are cylinders. The overall size of the sky is only about 3 meters, but it's set to draw behind the scene, to minimize z-fighting. Parallax is faked by shifting the cylinders. The sky dome itself isn't using any textures at all here and is using values instead, to get a smoother gradient. The clouds are particles.