To Supply 1.5 Million Tons of Blue Hydrogen to Korea
Lotte Chemical is expected to participate in a global blue hydrogen and ammonia alliance promoted by Saudi Aramco, the world’s largest energy company.
The company has recently started talks with Saudi Aramco on cooperation in the blue hydrogen and ammonia business. Officials from the two companies recently met in Korea to discuss ways to supply up to 1.5 million tons of blue hydrogen to Korea. Lotte Chemical has started a feasibility review of the plan.
Industry insiders predict that the two companies will finalize a joint project blueprint by the end of this year. Lotte Chemical is expected to make an equity investment of hundreds of billions of won in the project.
Prior to Lotte Chemical, GS Energy participated in a blue ammonia production project in the United Arab Emirates (UAE) last year. At that time, analysts said GS Energy secured a 10 percent stake in the project by investing between 60 billion won and 100 billion won.
Saudi Aramco is promoting a 10 million-ton blue hydrogen and ammonia production project and is discussing equity investments with its partners from around the world to distribute risks. An industry insider said one or two Korean companies are expected to take part in the project.
Blue hydrogen is classified as clean hydrogen. Like gray hydrogen, it is based on natural gas, but carbon dioxide generated during the process is captured and stored without being released into the atmosphere. Blue hydrogen is considered the most realistic alternative to clean energy, as the economic and technical limitations in producing green hydrogen have not been resolved.
Global hydrogen demand is expected to grow by 6.2 percent annually from 87 million tons in 2020 to 212 million tons in 2030 and 528 million tons in 2050, according to the International Energy Agency (IEA). Korea’s annual hydrogen demand is also expected to climb by 9.6 percent annually from 1.9 million tons in 2020 to 5.8 million tons in 2030 and 29.9 million tons in 2050. For this reason, oil-producing countries in the Middle East such as Saudi Arabia and the UAE are promoting large-scale blue hydrogen and ammonia production projects.