POSCO International partners with UAE's state oil producer for blue hydrogen business

By Kim Joo-heon Posted : January 31, 2024, 17:14 Updated : January 31, 2024, 17:14
Courtesy of POSCO International
[Courtesy of POSCO International]

SEOUL -- POSCO International, a trading arm of South Korea's steel group POSCO, will work with an Abu Dhabi-based state oil company to push for blue hydrogen business. After creating a blue hydrogen infrastructure, POSCO International will supply the clean energy source to POSCO's steel plant in South Korea’s southern industrial city of Gwangyang starting in 2029.

Blue hydrogen is favored by industries because of its reasonable production cost compared to green hydrogen based on renewable energy. It is produced using carbon capture and storage (CCS), a process designed to capture and store CO2 generated during the hydrogen production process. POSCO has tried to develop technologies for supplying green hydrogen to power stations and industrial facilities. Green hydrogen does not use any fossil fuel during its manufacturing process. 
POSCO International said the company partnered with the Abu Dhabi National Oil Company (ADNOC) for the production and distribution of liquefied natural gas (LNG)-based blue hydrogen. The clean hydrogen will be also provided to clients near Gwangyang such as the southern port city of Yeosu and Hadong some 270 kilometers (168 miles) south of Seoul. The project also involves the holdings company of POSCO.

The three sides will also cooperate in CCS-related projects. The technique uses special equipment to collect carbon dioxide created after burning fossil fuels or biomass before it is released into the atmosphere. As of 2022, the carbon capture technique re-collected some 0.001 percent of global carbon emissions. 

"Through stable and clean hydrogen supply, we aim to contribute to the development of the national hydrogen industry," POSCO International's energy division head Lee Jun-hyeok said in a statement on January 31. The blue hydrogen infrastructure will be set up at the company's LNG storage terminal in Gwangyang. LNG is widely used in South Korea as fuel for vehicles, power plants, and other industrial purposes.
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