South Korea’s third largest conglomerate SK Group is fielding SK Gas Co. to command hydrogen business to build it up as its green growth engine along with rechargeable battery.
According to multiple industry sources on Monday, SK Gas is spending billions of dollars to establish a hydrogen value chain complex along the southern coast of Ulsan City by 2025.
The company will be in charge of creating a comprehensive hydrogen economy from import of raw materials and production to storage and distribution.
The mammoth project is expected to cost several billions of dollars and shift the company’s mainstay in LPG and LNG business to hydrogen.
South Korea is going all-out on hydrogen economy to make the clean fuel its primary energy source over nuclear and fossil fuel. The state-led push has engaged most of the key companies including SK, Hanwha, and GS.
Industry sources expect that SK Gas will initiate its hydrogen business based on byproduct hydrogen over green or blue hydrogen costing much longer time and more investment to develop and produce.
The sourcing would come from Ulsan-based SK Advanced capable of producing 30,000 tons of byproduct hydrogen annually.
Korea’s No. 1 LPG producer will also seek to build hydrogen extraction facility. An extracted hydrogen refers to hydrogen produced by stirring reaction between natural gas and high-temperature and high-pressure vapor. Applying technology to sample and store carbon dioxide can create blue hydrogen.
Sources noted that SK Gas is capable of enhancing competitiveness in hydrogen extract production through its gas factories and terminal infrastructure.
SK Gas is engaged in trade of both LNG and LPG that are used as raw materials to produce extracted hydrogen, allowing it to secure raw materials at lower cost.
Produced hydrogen will be supplied to gas generators and fuel cell facilities in Ulsan, where the company has a hydrogen pipe over 100 kilometers long.
The 1.2-trillion-won LNG and LPG combined cycle power plant with 1.2-gigawatt capacity breaking ground next year is also capable of hydrogen mix generation.
SK Gas will also build a liquid hydrogen facility that uses cold energy generated from its LNG terminal. The company can launch hydrogen charging station business through a joint venture with Lotte Chemical. SK Gas plans to set up around 100 hydrogen charging stations across the country by 2030.
SK Gas has already invited partners for its ambitious project.
The company signed a memorandum of agreement with Lotte Chemical to establish a joint venture last month to build a fuel cell power plant based on byproduct hydrogen and hydrogen charging stations. It entered into a MoU with Korea East-West Power and Doosan Heavy Industries last week to carry out a hydrogen dual fuel gas turbine development demonstration project.
SK Gas set up an overseas corporate venture capital entity in Silicon Valley to seek investments in potential startups.
By Lee Yoon-jae and Lee Eun-joo
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