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Hydrogen fuel

SK Gas sets sights on liquid hydrogen as LPG market fizzles

Oct 11, 2020 (Gmt+09:00)

SK Gas Ltd., South Korea’s No. 1 liquefied petroleum gas (LPG) producer, is preparing to enter the liquid hydrogen manufacturing market as part of its efforts to diversify beyond the shrinking LPG market.

It launched a task force for its hydrogen business last month and recently signed a memorandum of understanding with Hylium Industries Inc. for a business tie-up, according to company sources on Oct. 11. Hylium, founded in 2014, is the first South Korean company to independently develop liquid hydrogen manufacturing technology.

The SK Group unit expects hydrogen to be distributed in the liquid state once the hydrogen fuel cell vehicle market expands. Liquid hydrogen has much less volume than hydrogen gas.

“We are considering producing liquid hydrogen at the (liquefied natural gas) terminal, to be constructed in Ulsan by 2024, to supply to hydrogen fueling stations,” one of the SK sources told The Korea Economic Daily.

SK Gas’ joint venture, Korea Energy Terminal Co., is building the liquefied natural gas (LNG) storage terminal with a capacity of 2.7 million barrels in Ulsan, a southeastern port city. The venture was established jointly with Korea Natural Oil Corp.

SK is also seeking to transform its 510 LPG filling stations across the country into hydrogen charging stations to reduce costs.

“We will receive applications from the station operators to transform them,” the company source said.
SK Gas' first station for both LPG and hydrogen built in Incheon in Nov. 2019 as part of a pilot program

Gaseous hydrogen is cooled below minus 253 Celsius degrees. The key to liquid hydrogen commercialization is how to quickly cool gaseous hydrogen at competitive prices. The startup Hylium is able to liquefy hydrogen quickly by using refrigerants and electric power.

Building a liquid hydrogen station requires a smaller space than the typical LPG station. A typical liquid hydrogen charging station measures 330 square meters, just one fourth that of an existing hydrogen gas station, according to company sources.

SK Gas’ attempted foray into the liquid hydrogen market is seen as an effort to find new growth areas as it is suffering from low gas prices and weak demand in the prolonged pandemic era.

South Korea’s LPG vehicle market has been on the decline since 2000. LPG demand for both transport and home cooking has contracted by 4% on average over the past decade.                 
         
Meanwhile, Hyundai Motor Co. plans to bump up its annual production capacity for hydrogen electric trucks to 2,000 units by next year. Hyundai Oilbank Co. said on Oct. 8 that it will increase its number of EV fueling stations to 200 by 2023 from the current 20 installed at its directly managed petrol stations in the country.

Write to Jae-Kwang Ahn at ahnjk@hankyung.com

Yeonhee Kim edited this article. 

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