South Korea and Saudi Arabia Plan Hydrogen Production and CO2 Shipping

Saudi Arabia and South Korean entered into an innovative multi-part agreement designed to build opportunities in the emerging hydrogen sector. The deal leverages Saudi Arabia’s LPG capabilities and develops shipping and manufacturing capabilities for hydrogen as well as CO2 capture.

Saudi Arabia’s state-run oil company Aramco will work with divisions of South Korea’s Hyundai Heavy Industries to develop the new hydrogen projects. South Korea will benefit by gaining a source to produce the hydrogen while Saudi Arabia will use the CO2 produced in the process to increase production its oil fields. The deal accelerates the potential for hydrogen by using LPG which is easy to ship instead of waiting for future hydrogen shipping technologies.

Hyundai OilBank will buy liquefied petroleum gas from Aramco, which will delivery it to South Korea on gas tankers built by Hyundai. In South Korea they will use the gas to produce blue hydrogen, so called because the CO2 released during the production is captured. Hyundai OilBank plans to supply the hydrogen for industrial applications in South Korea as well as to build a network of hydrogen filling stations for the use vehicles in South Korea.

The CO2 captured in the hydrogen production will be shipped to Saudi Arabia. Unlike other projects which propose to capture and store the CO2, in this agreement Saudi Arabia will receive the byproduct of the manufacturing process. Aramco uses a process known as enhanced oil recovery where the carbon dioxide is injected into old oil wells to release additional oil and enhance the production from those wells.

To realize this concept, Hyundai’s shipbuilding division Korea Shipbuilding & Offshore Engineering Co. will be developing a new class of ships to transport the gasses. The plan is to build ships that can transport both the LPG to South Korea and return carrying the captured CO2. The carbon dioxide will be shipped as a refrigerated liquid under moderate pressure.

No timeline was announced for when they expected to start the shipping and production of hydrogen.