Refiner S-Oil acquires 20% stake in fuel cell JV
S-Oil President Ryu Yul, left, poses with Fuel Cell Innovations CEO Lee Tae-won during an investment agreement signing ceremony at the refiner's headquarters in Mapo-gu, Seoul, Friday. Courtesy of S-Oil
By Nam Hyun-woo
S-Oil is seeking to diversify its energy mix by acquiring a 20-percent stake in a Korean-Saudi Arabian fuel cell company.
The refiner said Sunday that it signed an agreement with Fuel Cell Innovations (FCI) at a ceremony in Seoul on Friday.
FCI is a joint venture between Korea and Saudi Arabia and has more than 40 patents focusing on solid oxide fuel cell systems. FCI has forged partnerships with a number of fuel cell companies, including a joint development project with Italy's SOLIDpower which specializes in fuel cell systems for residential and commercial buildings, S-Oil said.
The investment will help S-Oil become FCI's largest stakeholder in Korea, a factor to drive S-Oil's hydrogen fuel cell-oriented businesses. S-Oil did not clarify the exact amount of its investment. The move is also seen as an effort by the company to diversify its energy mix as Korea aggressively seeks to become carbon neutral.
“This investment heralds our full-fledged foray into the hydrogen economy and it is anticipated to drive S-Oil's sustainable growth,” S-Oil CEO Hussain Al-Qahtani was quoted as saying. “Our company will also vigorously join hands in the government's endeavor to cut carbon emissions.”
Following S-Oil's investment, FCI will spend up to 100 billion won ($88.57 million) by 2027 to establish manufacturing facilities with capacities over 100-megawatts and expand its portfolio to “green hydrogen” or hydrogen produced through renewable energy.
S-Oil follows in the footsteps of rival SK Group, the owner of Korea's largest oil refiner, which announced a 1.7 trillion won investment in a U.S. fuel-cell maker in January of this year.
S-Oil said it will try to advance into both domestic and Middle Eastern fuel cell markets. In the Middle East, S-Oil and FCI plan to sell fuel cell products to Saudi Arabian power and telecom companies by joining hands with local partners.
FCI is contracted to supply 150 megawatts of fuel cells to a Saudi Arabian partner firm, and is developing products for power generation facilities and buildings that suit local climate conditions and legal requirements, S-Oil said.
S-Oil said its strategic investment in FCI will help improve the refiner's presence in the overall hydrogen supply chain, ranging from production and distribution to marketing. S-Oil said it is cooperating with its largest stakeholder, Saudi Aramco, to start businesses to produce liquefied hydrogen and operate hydrogen fueling stations in Seoul.