South Korea's SK E&S, US Plug Power commit $746 million to hydrogen project

South Korea's major LNG importer and biggest private power utility SK E&S and its US-based partner Plug Power plan to jointly spend Won 1 trillion ($746 million) building a mammoth facility for the production of hydrogen fuels and electrolysis in South Korea, SK E&S said May 2

Under the joint venture, SK E&S and Plug Power will invest Won 510 billion and Won 490 billion, respectively, to build a "hydrogen gigafactory" and research center for hydrogen technologies.

The hydrogen gigafactory aims to start commercial production in 2025, providing hydrogen fuel cells for vehicles and water electrolysis platforms for power generation to the South Korean and Asian markets, SK E&S said in a statement.

Hydrogen fuel cells produced at the gigafactory will be mainly supplied to SK E&S' clean hydrogen plant under construction in Boryeong, close to its LNG import terminal on the country's west coast.

"The joint venture also plans to invest in building liquefied hydrogen stations across South Korea," a company official said, adding further details would be disclosed later.

SK E&S and Plug Power, a US fuel cell maker, launched a 51:49 joint venture in 2022 for hydrogen projects called SK Plug Hyverse. The JV came after SK E&S and its parent SK Holdings acquired a combined 9.9% stake in Plug Power to become its biggest shareholder.

SK E&S said it will leverage Plug Power's advanced hydrogen fuel cell technology to produce liquid hydrogen, and that the two companies have agreed to jointly tap into the Asian hydrogen market to capitalize on the growing demand for hydrogen.

SK E&S has been building its 250,000 mt/year hydrogen production plant in Boryeong since May 2021 and aims to start commercial production in 2025 as part of efforts to diversify an energy mix focused heavily on natural gas.

The plant will use LNG mainly from the Boryeong terminal to produce blue hydrogen, or hydrogen produced from fossil fuel in a process that captures CO2 emissions, and also produce clean hydrogen through electrolysis, a process by which electricity splits water to extract and produce hydrogen from the water, according to company officials.

SK E&S is also spending Won 500 billion to build what it considers the world's biggest hydrogen liquefaction plant with a capacity of 30,000 mt/year in 2023 inside the oil refining complex of SK Incheon Petroleum SK E&S' affiliate located in Incheon, on the country's northwest coast.