S Korean firms eye H2, ammonia output in Saudi Arabia

State-owned utility Kepco and four other South Korean companies have partnered Saudi Arabia's sovereign Public Investment Fund (PIF) to co-operate on hydrogen and ammonia production in Saudi Arabia.

The companies plan to develop a green hydrogen and ammonia project with a 1.2mn t/yr production capacity, according to Kepco on 17 November. The other four firms are fellow state-owned utility Korea Southern Power, state-owned oil firm KNOC, conglomerate Samsung C&T and steel producer Posco.

The companies will carry out a preliminary feasibility study this year before selecting a business site and developing the project from 2023. The firms will also participate in developing the entire ammonia value chain, including production, transportation and utilisation.

"It is necessary to secure more than 80pc of domestic hydrogen and ammonia demand overseas," according to Kepco.

Kepco also on 17 November separately signed a co-operation agreement with Saudi energy firm Acwa Power, which is majority owned by PIF, to develop ammonia businesses. The two firms previously signed a deal in October to co-operate in green hydrogen and ammonia businesses, with the offtake to be used at Kepco's South Korean power plants. Kepco is to increasingly rely on green ammonia produced by green hydrogen for power generation and is targeting the utilisation of 5mn-10mn t of green ammonia by 2030, according to Acwa. The companies are also joint investors in Saudi Arabia's Rabigh 1 independent power plant project.

South Korean firms have also been involved in other Saudi partnerships. South Korean chemical producer Lotte Fine Chemical last month signed a deal to import 50,000t of blue ammonia from Saudi Arabia by the end of this year, in efforts to create a global supply chain. South Korean firms and Saudi Arabia's state-controlled Saudi Aramco also signed a number of initial agreements in January to study potential partnerships in hydrogen and ammonia projects.

By Tng Yong Li