Samsung C&T, S-Oil in hydrogen transport partnership

Samsung C&T Corp., the construction and trading arm of Samsung Group, has tentatively agreed with S-Oil Corp. to cooperate in securing overseas green hydrogen and green ammonia producers in Saudi Arabia and other countries for transportation to South Korea.

Samsung and S-Oil, a South Korean oil refiner, inked a memorandum of understanding on Friday to build a hydrogen and biofuel business partnership, Samsung said in a statement.

Under the partnership, both companies will cooperate in building domestic infrastructure to transport and distribute green hydrogen and green ammonia produced abroad. Saudi Arabia is one of the candidate countries where they are considering importing clean energy, but nothing has been decided yet on their overseas hydrogen suppliers, a Samsung source added.

Going forward, they will expand the cooperation into hydrogen fuel cells, which might include setting up hydrogen charging facilities at S-Oil's 2,000 gas stations across South Korea, as well as exploring other low-carbon energy sources.

A hydrogen fuel cell uses hydrogen to produce electrical energy and serves as the engine of a hydrogen vehicle.

Their alliance will also extract hydrogen back from the green ammonia for various uses in the hydrogen sector.  

Samsung will utilize its global business network and experience to keep track of overseas producers of green hydrogen and green ammonia. S-Oil will make use of its oil refineries, petrochemical facilities and distribution networks at home to transport the low-carbon energy to Korea.

As part of its coal-free initiative announced in October 2020, Samsung C&T will continue to explore new business opportunities on green hydrogen and green ammonia in cooperation with other companies, Samsung C&T Chief Executive Koh Jung-suk said in the statement. 

Hydrogen, which is often regarded as the fuel of the future, has a critical downside in that its storage and transportation are extremely difficult. It is not only highly explosive but also needs to be cooled to an ultra-low temperature of minus 253°C for storage and transportation.

For storage and transportation, green hydrogen is initially made into green ammonia, after which the green ammonia is decomposed back into hydrogen again for industrial use.

Green ammonia has become the center of attention in the global hydrogen sector due to its practicality in transporting green hydrogen. Green ammonia refers to ammonia that is produced through 100% renewable and carbon-free processes. It can be made by combining green hydrogen, also made from 100% renewable energy sources, with nitrogen from the air.

Ammonia can be transported easily at room temperature in its liquefied form. It can also store 1.7 times more hydrogen than when transported as liquefied hydrogen, given the same-sized container.

HYDROGEN FUEL CELLS

To expand into the hydrogen energy sector, S-Oil had acquired a 20% stake in Fuel Cell Innovations Co. (FCI) for 8.2 billion won earlier this year. The oil refiner aims to make its foray into overseas fuel cell markets, such as the Middle East, by first supplying fuel cells to Saudi-based electricity power and telecommunications companies. 

Saudi Aramco, the world’s biggest oil company, is the largest shareholder of S-Oil with a 63.4% stake as of end-June.

FCI is a joint venture between South Korea and Saudi Arabia with an extensive portfolio of around 40 solid oxide fuel cell (SOFC) patents.

Last December, S-Oil announced Vision 2030, a long-term growth strategy that aims to maximize the profitability of existing businesses such as refining, petrochemical and lube, while also pushing for new businesses, including hydrogen, fuel cell and recycling, to achieve sustainable growth.

(Corrected on Sept. 24 to say that the partnership between Samsung C&T and S-Oil will not involve the production of green hydrogen and green ammonia, nor using the oil refining and petrochemical facilities of Saudi Aramco.)

Write to Kyung-min Kang at kkm1026@hankyung.com
Yeonhee Kim edited this article.