SK ecoplant Hits the Jackpot by Participating in Canada World Energy GH2's $4.5 Billion Green Hydrogen Commercialization Project
SK ecoplant Invests 20% Stake and Participates in Project Development ··· Emerges as a Key Player in Global Green Hydrogen Projects
Recognized as a Major Achievement Following SK Group Chairman Chey Tae-won's Call for Business Model Innovation
Undertakes Comprehensive Project from Initial Design to Supply and Installation of Electrolyzers and Construction of Green Ammonia Plant ··· Secures Exclusive Opportunity for Approximately $1.5 Billion EPC Work
Integrates Green Hydrogen Production, Storage, and Conversion to Green Ammonia with North America-Europe Distribution ··· Targets Mass Production of Green Hydrogen by 2025 and Green Ammonia by 2026
SK ecoplant Completes Value Chain from Wind Power Development to Green Hydrogen Production, Elected President of Wind Industry Association, and Becomes a Leading Renewable Energy Company
Environment and energy company SK ecoplant is poised to become a key player in a massive intercontinental green hydrogen commercialization project, leveraging its green hydrogen value chain.
On the 17th, SK ecoplant announced it had signed an investment agreement with Canada World Energy GH2 to participate in the $4.5 billion (approximately 6 trillion KRW) 'Nujio’qonik Green Hydrogen Phase 1 Project' at the Lotte Hotel Seoul in Jung-gu, Seoul. World Energy GH2 is developing a large-scale green hydrogen project based in the Stephenville area of Newfoundland and Labrador, Canada.
This agreement is noteworthy as it represents a significant achievement for SK ecoplant, which has transformed into an environment and energy company following SK Group Chairman Chey Tae-won's directive for fundamental business model innovations for each member company over the years.
The signing ceremony was attended by Park Kyung-il, President of SK ecoplant, John Risley, Chairman of World Energy GH2, Sean Leet, CEO of World Energy GH2, and other executives from both companies.
This project will take place on Newfoundland Island in Newfoundland and Labrador, Eastern Canada. It involves producing green hydrogen through water electrolysis using electricity generated from wind power without carbon emissions and converting this green hydrogen into green ammonia for transportation to other continents, such as Europe.
The project name 'Nujio’qonik' means 'Where the sand blows' in the indigenous language, indicating that Newfoundland Island is traditionally known for its excellent wind conditions, making it an ideal site for wind power generation. Its location at the easternmost part of Canada makes it convenient for exporting green ammonia to Europe and other continents.
The Phase 1 project, costing approximately $4.5 billion (around 6 trillion KRW), involves about 1 GW of onshore wind power generation for electricity production and a total of 600 MW of solid oxide electrolysis cells (SOEC) and polymer electrolyte membrane electrolysis cells (PEMEC) for green hydrogen production. A green ammonia plant will also be constructed to convert the approximately 60,000 tons of green hydrogen produced annually into about 360,000 tons of ammonia. The goal is to start green hydrogen production in March 2025 and green ammonia production in March 2026.
SK ecoplant has secured an exclusive opportunity for approximately $1.5 billion (around 2 trillion KRW) worth of EPC work for this project. They will supply and install electrolyzers for green hydrogen production, including the overall project's basic design (FEED: Front End Engineering Design). This month, SK ecoplant will commence the conceptual design (Pre-FEED: Pre Front End Engineering Design) to objectively review the entire project's framework. Discussions are also underway regarding their participation in the EPC (Engineering, Procurement, and Construction) of the wind power complex. The EPC for the green ammonia plant, which will convert green hydrogen into green ammonia, will be handled in collaboration with SK eco engineering, a subsidiary.
Through this agreement, SK ecoplant has secured a 20% stake for project development and an exclusive opportunity for EPC work, positioning itself as a key player in the intercontinental green hydrogen project. With this agreement, SK ecoplant will invest approximately $50 million (around 66 billion KRW) to participate in project development and will be responsible for the entire green hydrogen project, from supplying key electrolyzers to the green ammonia plant's EPC.
Green ammonia produced based on green hydrogen will be exported to European countries such as Germany. Last August, the leaders of Canada and Germany established a 'Hydrogen Alliance' aiming to create a hydrogen supply chain across the Atlantic. With this national agreement as a backdrop, the project is expected to progress rapidly. The project is anticipated to be a significant initiative for realizing the global hydrogen ecosystem early, as it encompasses everything from producing and storing green hydrogen based on renewable energy to converting it into green ammonia and transporting it between continents.
Ammonia (NH3), a compound of three hydrogen atoms and one nitrogen atom, is highlighted as a storage and transportation medium for hydrogen due to its simple manufacturing process and ease of liquefaction at room temperature. It has about 1.7 times the storage capacity per unit volume compared to liquid hydrogen. Conventional ammonia is already used industrially and agriculturally in various countries, making it advantageous to distribute using existing storage and transportation infrastructure.
The Bloom Energy electrolyzer (SOEC) supplied for this project uses a high-temperature electrolysis method utilizing steam at 850°C. Since thermal energy partially replaces the electrical energy consumed to extract hydrogen from water, less electrical energy is used, resulting in higher hydrogen production efficiency. SK ecoplant and Bloom Energy also plan to recycle the heat generated in the ammonia synthesis process to further reduce energy consumption for green hydrogen production, aiming for competitive pricing.
World Energy GH2, the project manager, has already secured the project site and is in the pre-licensing process to begin producing green hydrogen and green ammonia in 2025 and 2026, respectively. They plan to build their own infrastructure, including wind turbines, electrolysis, ammonia synthesis plants, and port shipping facilities.
SK ecoplant's previous experience and capabilities in green hydrogen electrolysis and engineering played a decisive role in securing this project. SK ecoplant has established a green hydrogen value chain, from renewable energy sources like wind power to SOEC-based electrolysis. They have also developed a 2.6 GW offshore wind power project in collaboration with global offshore wind power developers and their subsidiary SK Oceanplant, a top-tier company in offshore wind power foundations. These qualifications led to Park Kyung-il, President of SK ecoplant, being appointed President of the Korea Wind Energy Industry Association last month. Through this project, SK ecoplant aims to strengthen its commercial production capabilities for SOEC-based green hydrogen and continue leading the global green hydrogen and electrolysis market.
Park Kyung-il, President of SK ecoplant, stated, "By participating in the first intercontinental green hydrogen commercialization project in Korea, we have secured a favorable position for future business opportunities. Based on SK ecoplant's green hydrogen value chain, rapid execution capabilities, and experience, we will firmly establish ourselves as a leading global green hydrogen and green ammonia company."
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