Saudi Arabia is reportedly planning to ship gas to South Korea, to produce hydrogen and the carbon dioxide emitted during the process will be brought back to the kingdom.
The South Korean petroleum and refinery company Hyundai OilBank will take liquefied petroleum gas (LPG) cargoes from Saudi Aramco which it will then convert into hydrogen, as per the statement from the Hyundai Heavy Industries Holdings. The hydrogen will be then used at desulfurization facilities and to power vehicles.
According to a spokesman of Hyundai Heavy, in the deal made by both parties, they have agreed to transport the carbon dioxide emitted in the hydrogen-making process back to Saudi Arabia and the gas will then be used in Aramco’s oil production facilities.
The government-owned oil company already uses carbon dioxide to pump more crude out of the ground in a process known as enhanced oil recovery. Saudi Aramco did not immediately respond to a request for more information.
“It’s an option to get around the problems of shipping blue hydrogen but still using blue hydrogen in a global market,” said Florian Forster, a consultant at Boston Consulting Group.
The plan brings ease in shipping carbon dioxide rather than hydrogen. The pollutant can be transported as a refrigerated liquid under moderate pressure. Blue hydrogen is made from natural gas and the carbon dioxide emitted in the process is captured.
In September, Aramco exported its first cargo of hydrogen as ammonia to Japan which was produced by combining the process of carbon capture. The agreement with Hyundai OilBank differs because this time hydrogen will be produced in South Korea, rather than where the gas was extracted.
“It seems the project will bank on the idea that shipping LPG to Korea and carbon dioxide back to Saudi Arabia will be cheaper than shipping hydrogen to Korea,” said Martin Tengler, BloombergNEF’s lead hydrogen analyst.
Korea Shipbuilding & Offshore Engineering, the vessel-building wing of Hyundai Heavy, will be jointly developing the world’s first ship capable of carrying LPG and captured carbon dioxide.
Saudi Arabia is more likely to find suitable buyers for its LPG with an emissions removal model in Asia than elsewhere, said Anise Ganbold, research leader for energy at Aurora Energy Research.