SK Gas builds hydrogen production plant in Ulsan, investment amounts to several billion US dollars

26. August 2021

South Korea’s third-largest conglomerate, SK Group, has named its subsidiary SK Gas Co. as the lead company for expanding its hydrogen business. In addition to building plants to produce green hydrogen, it will also develop fuel cells and batteries. According to multiple industry sources, SK Gas is investing several billion U.S. dollars to build a hydrogen production plant and related infrastructure along the southern coast of the Korean city of Ulsan by 2025. The company plans to build facilities and equipment for the entire hydrogen industry value chain. The project generates increased import demand for numerous, industry-relevant products that require KC certification for the Korean market. The plans include importing raw materials, production, storage and distribution. The mammoth project will cost SK Gas several billion U.S. dollars and moves its current main business in natural gas and liquefied petroleum gas significantly in the direction of hydrogen.

 

 

South Korea is pinning its hopes largely on hydrogen and its importance to industry, the economy and society as an environmentally friendly energy source and the country’s primary energy, as opposed to nuclear energy and fossil fuels. The government-initiated push for energy transition reached almost all well-known companies in this field such as SK, Hanwha and GS. Industry experts expect SK Gas to build up its hydrogen business from by-products of the chemical industry, at least in the beginning, in order to save costs in investment and production. Only later will the hydrogen also be produced with the help of renewable energy and have a good environmental balance.

SK Advanced, also based in Ulsan, is capable of producing around 30,000 tons of hydrogen annually as a byproduct. SK Gas, South Korea’s largest producer of liquefied natural gas, is also planning a plant to separate hydrogen from natural gas. By reusing and storing the resulting CO₂, the hydrogen can at least be called “blue hydrogen.” The hydrogen produced by SK Gas will be transported via pipelines up to 100 kilometers long to gas generators and fuel cells in other facilities in the Ulsan area.

To distribute the hydrogen, SK Gas is building a hydrogen liquefaction plant that will draw its cooling energy from the natural gas terminal. Through a joint venture with Lotte Chemical, the hydrogen will be sold at gas pumps. To this end, SK Gas plans to build around 100 hydrogen filling stations in South Korea by 2030. It has also entered into a joint venture with Lotte Chemicals to build a fuel cell power plant. A demonstration plant for a hybrid gas turbine powered by hydrogen is to be developed with Korea East-West Power and Doosan Heavy Industries. SK Gas has also established a venture capital company in Silicon Valley to invest in promising start-ups.

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