Lotte Chemical-SK Gas Joint Venture Selected as Hydrogen Power Operator

Construction of a 20MW-Class Eco-Friendly Hydrogen Fuel Cell Power Plant at Lotte Chemical Ulsan Plant

Lotte SK Enerroot's wholly owned subsidiary, Ulsan Enerroot No. 2, was finally selected as the successful bidder in the general hydrogen power generation bidding market in the first half of this year.

Lotte SK Enerroot is a joint venture established in September last year by Lotte Chemical Co., Ltd. (45%), SK Gas Co., Ltd. (45%), and Air Liquide Korea (10%) for by-product hydrogen-based power generation projects and hydrogen transportation businesses.

Lotte SK Enerroot will install a 20 MW-class eco-friendly hydrogen fuel cell power plant within the Lotte Chemical Ulsan plant. It is scheduled to operate for 20 years starting in 2025, having secured a stable supply of by-product hydrogen from Lotte Chemical Group and SK Gas affiliates.

Unlike other operators, it applies a hydrogen-exclusive model with zero carbon emissions. When clean hydrogen is introduced in the future, fuel conversion will be possible without additional equipment changes or modifications, and by utilizing the waste heat from the fuel cells, it contributes to greenhouse gas reduction, highlighting its strengths as an eco-friendly power source.

Once the hydrogen fuel cell power plant is completed, it will supply approximately 160,000 MWh of eco-friendly electricity annually to about 40,000 households (based on four persons per household) in Ulsan. It will also contribute to revitalizing the local economy by increasing Ulsan city tax revenue and generating direct and indirect employment within the region.

Since launching the Hydrogen Energy Business Unit in April last year, Lotte Chemical has been leading the establishment of the domestic hydrogen ecosystem by promoting collaboration with various domestic and international partners. With this successful bid by Lotte SK Enerroot, a long-term 20-year contract has been secured, marking the first step in expanding its business area into the energy industry, which can expect stable profits amid the volatility of the petrochemical industry.

Hwang Jin-gu, head of Lotte Chemical's Hydrogen Energy Business Unit, said, "We are executing future projects at a fast pace to achieve our 2030 vision, and this successful bid is the first achievement in the hydrogen energy business," adding, "We will accelerate the hydrogen energy business further based on this foundation."

Since 2021, SK Gas has declared its new vision as a 'Net Zero Solution Provider' and is operating a 'gradual energy transition plan' to implement this. In particular, it is practically promoting the establishment of the entire value chain for hydrogen and ammonia introduction, production, storage, transportation, and utilization, leading the domestic hydrogen ecosystem construction.

Yoon Byung-seok, CEO of SK Gas, stated, "The selection of Lotte SK Enerroot as the hydrogen fuel cell power generation operator has become an opportunity for SK Gas's hydrogen business to take a step forward," and added, "SK Gas will do its best to build Korea's hydrogen value chain through continuous investment and efforts."