South Korea's Kogas steps up hydrogen production drive with plans for three plants

State-owned Korea Gas Corp., one of the world's biggest LNG buyers, plans to build three hydrogen production plants in South Korea as part of efforts to achieve a goal of hydrogen production of 1.04 million mt/year by 2030, a company official said Dec. 7.

"The hydrogen production plants, which will serve as three major bases for Kogas' hydrogen business, will produce hydrogen using steam reforming of natural gas supplied through its nationwide pipelines," the official said.

Kogas has just started works to build the first such hydrogen production plant with a capacity of 1,400 mt/year in Gwangju, a major city in the country's southwestern region. The state utility will use Won 25.8 billion ($21.8 million) to build the plant by March 2023.

The company will build two more hydrogen production plants in the southeastern industrial city of Changwon and the western port city of Pyeongtaek, which houses Kogas' major LNG import terminal, by the end of 2023. It is also pushing to build to more hydrogen production plants after 2023.

"The hydrogen production project is part of our efforts toward a clean energy transition from its LNG-focused portfolio," the official said.

"Kogas will play a leading role in the country's push for energy transition focused on hydrogen by building the basic hydrogen production plants and related infrastructure," he said.

Kogas aims to produce 1.035 million mt/year of hydrogen by 2030 -- 668,000 mt/year of gray hydrogen and 167,000 mt/year of blue hydrogen, both to be based on natural gas, and 200,000 mt/year of green hydrogen.

In addition, Kogas plans to import 1.21 million mt/year of green hydrogen from 2030.

Earlier this year, Kogas formed a partnership with the country's second-biggest oil refiner GS Caltex to build a liquid hydrogen factory with a capacity of 10,000 mt/year by 2024 on idle land at a Kogas LNG terminal, which will be enough to power close to 80,000 fuel cell cars a year.

The two companies also agreed to build hydrogen charging stations around Seoul and other select regions in time for the completion of the factory in 2024.

"By combining GS Caltex's experience in running gas and charging stations and the experience of Kogas in the LNG business, the two companies will create synergy in the hydrogen business," the company official said.

Kogas has long served as the country's sole LNG supplier, maintaining a monopoly on LNG imports and domestic sales since its establishment in 1983.

In 2020, Kogas imported 31.93 million mt, accounting for 80% of the country's total imports of 39.98 million mt, down 5.4% from 33.74 million mt in 2019.

The remaining 20% were imported by private power utility and city gas provider SK E&S, South Korea's top steelmaker POSCO, and some other state power utilities that have been allowed for LNG imports for their own uses in electricity generation.