Top global LNG importer Korea Gas to transition fully to hydrogen

The state-run gas distributor plans to invest in hydrogen production in Australia and the Middle East

Models of Kogas LNG tanks at the World Gas Conference in South Korea, on Tuesday. Bloomberg

Korea Gas, one of the world’s largest liquefied natural gas importers, expects to win benefits from its current business as it shifts to a future focused on hydrogen.

“We’ll completely transform our LNG-driven operations into hydrogen by 2050 in line with South Korea’s carbon neutrality target,” Lee Jae Hoon, a general manager of the company’s hydrogen business development team, said in an interview.

“We have advantages over utilising our existing gas infrastructure, technology and experience.”

The state-run gas distributor, also known as Kogas, expects to begin green hydrogen imports from 2027, and intends to invest in production of the zero-emissions fuel in places including Australia and the Middle East, as it currently does with LNG.

Kogas is joining several global energy majors in pushing the case for hydrogen, and BP confirmed this week it would press ahead on projects with two of the UAE’s biggest energy companies.

While the gas is billed as potentially key to curbing emissions from carbon-heavy industrial processes like steelmaking, the market is still in its infancy.

There’s also been debate over plans from existing energy suppliers to use fossil fuels and carbon capture to produce hydrogen, rather than processes that require only renewable electricity and water.

By 2026, Kogas plans to complete demonstration projects to blend 20 per cent of hydrogen into the existing gas pipeline across South Korea and would aim to keep increasing the proportion, Mr Hoon said on the sidelines of the 2022 World Gas Conference in Daegu.

The proposal would require more than a million tonnes of hydrogen and reduce South Korea’s greenhouse gas emissions by 7.5 million tonnes, Kogas said in a statement this week.

South Korea’s national emissions were 727.6 million tonnes in 2018, a government filing shows.

Although Kogas is planning for some production of green hydrogen — made using zero-emissions electricity — domestically, the nation is constrained by a lack of available land for solar and wind projects.

The importer is in discussions with local shipbuilders to develop liquid hydrogen vessels and is also working on technologies for storage tanks, said Mr Hoon.