POSCO and Oman Set to Finalize $6.7 Billion Green Hydrogen Agreement

23 June, 2023 by

According to sources, an international consortium led by POSCO has successfully secured a $6.7 billion contract to establish a green hydrogen production facility in Duqm, Oman. This ambitious project is set to become the world's largest green hydrogen initiative. Within the consortium, South Korean steelmaker POSCO Group holds the largest stake of 28%.

Oman emerged as a favorable choice for hydrogen investment for POSCO, as stated by the company in March 2022. Subsequently, officials from Oman and POSCO held discussions earlier in 2023, paving the way for this groundbreaking venture.

Samsung Engineering has been appointed to oversee the project's engineering, procurement, and production phases. Other consortium members include French energy group Engie SA, four Korean state power companies, and Thailand's state-owned PTT Exploration and Production Public Company, which will facilitate the production and sale of green hydrogen.

The agreement between the consortium and Omani authorities, including the energy minister, is scheduled to be signed on June 21. Negotiations among the consortium partners concerning the project are currently underway, as reported by the Korea Economic Daily.

This contract marks POSCO's continued commitment to investing in green hydrogen production. Just recently, the company commenced operations at its new Pohang steel complex, designed to produce hydrogen-based green steel. Expected to be finalized by 2026, the facility will have an annual capacity of 300,000 tonnes of hydrogen-based steel, catering to diverse applications in heavy industries.

The Pohang steel complex distinguishes itself as the world's first steel plant to employ fluidized bed reduction reactors in its production process. The innovative HyREX (Hydrogen Reduction) technology enables the direct reduction of iron using hydrogen, followed by melting in an electric furnace to produce steel, all without generating carbon emissions.

This groundbreaking method relies on the separation of the reduction and melting processes, made possible by the fluidized bed reactor. As a result, POSCO can reduce steel with hydrogen, emitting water vapor instead of carbon dioxide, prior to the separate melting phase. Additionally, the production process is more efficient, as HyREX eliminates the need for pelletization, allowing POSCO to utilize mined ore directly.

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