SK Gas Co., a South Korean major liquefied petroleum gas (LPG) provider, and Korean chemicals firm Lotte Chemical Corp. are slated to set up a joint venture for by-product hydrogen power and hydrogen for transport. On Thursday, the two firms and global industrial gas supplier Air Liquide Korea signed an agreement for the JV establishment in Seoul.
SK Gas and Lotte Chemical have accelerated the launch of the JV since the two firms
signed a memorandum of understanding for a hydrogen business partnership in May 2021.
Air Liquide Korea, the Korean unit of French company Air Liquide SA, also signed an MOU with Lotte Chemical to enter the hydrogen mobility market last month. At the time, Lotte Chemical said
it will spend 210 billion won ($167.8 million) to build facilities for ethylene carbonate (EC) and dimethyl carbonate (DMC), two organic compounds used in electrolytes, which is a key material for EV batteries.
SK Gas, Lotte Chemical and Air Liquide Korea will respectively hold 45%, 45% and 10% stakes in the JV, and SK Gas and Lotte Chemical will jointly manage the venture. SK Gas said the JV will be founded in the third quarter of this year, after receiving approval from Korea’s antitrust watchdog the Fair Trade Commission.
The JV’s first project will be the construction of a hydrogen fuel cell power plant to begin operations in the second half of 2024 in Ulsan, a port city in southern South Korea, to secure by-product hydrogen. By-product hydrogen is generated by refining the mixture gas with a high concentration of hydrogen coming from some electrochemical processes. The product is increasingly used for fuel cell power.
The plant’s power production capacity will reach 500,000 megawatt-hours (MWh) per year, an amount that covers 120,000 four-person households a year. The venture will also build hydrogen fueling stations across Korea and seek collaboration in the production of blue and green hydrogen, both regarded as clean energy sources.
For the projects, SK Gas will supply by-product hydrogen generated from its Ulsan-based affiliates. The LPG provider will also lead the JV’s long-term growth given its experience in power generation and LPG charger network operation.
Lotte Chemical, the largest producer of the by-product hydrogen in Korea, will provide sites in its Ulsan-based plant as well as raw materials. The chemicals firm is making efforts to secure clients via its Lotte Group affiliates.
Air Liquide Korea will offer in-depth knowledge and technologies for hydrogen supply and distribution chains and fueling stations.
“We hope that the JV will serve as a stepping stone for vitalizing the hydrogen economy in Korea and contribute to the country’s transition to the hydrogen economy,” said Yoon Byung-suk, CEO of SK Gas.
“It is meaningful to converge the three companies’ core capabilities to form the foundation of the early stage hydrogen ecosystem,” said Hwang Jin-goo, resident of Lotte Chemical’s basic materials business division.
Air Liquide Korea President Nicolas Foirien said, “The partnership will contribute to the sustainable development of Korea’s hydrogen economy, as well as align with the Air Liquide Group’s climate strategy.”
Write to Kyung-Min Kang at
kkm1026@hankyung.comJihyun Kim edited this article.
