S-OIL to purchase blue ammonia from Aramco for hydrogen production

S-OIL CEO Anwar Al-Hejazi

S-OIL has agreed to a deal with Saudi Arabian energy firm Aramco to import blue ammonia to spur its local hydrogen production in Korea, according to the Korean refinery and energy giant, Wednesday.

S-OIL and Aramco signed a letter of intent (LOI) for the Korean firm to purchase the chemical product from the Saudi state-run energy company.

Aramco will solely produce blue ammonia by using carbon capture and storage (CCS) technologies, an eco-friendly method of neutralizing carbon emissions. The Saudi company will then ship the blue ammonia to Seoul so that the Korean firm can use it to spur its hydrogen production capabilities.

The bilateral agreement reflects both companies' shared efforts to neutralize carbon emissions by jointly setting up a production chain for hydrogen, a key ingredient for carbon-free clean energy.

Following the LOI deal, S-OIL said it will introduce new local infrastructure to store the shipped blue ammonia and utilize it for other diversified purposes.

S-OIL's strategic management bureau chief Ryu Yeol said that by bringing blue ammonia from Saudi Arabia, the company will not only contribute to the Korean government's initiative for hydrogen production but also see its carbon neutralization goal reached.

The major refinery firm in Korea has declared hydrogen production as its new growth engine. Its follow-up steps include purchasing shares of Daejeon-based fuel cell producer FCI and signing a partnership deal with Samsung C&T for future hydrogen businesses.