SK Ecoplant, a construction and energy arm of SK Group, on Wednesday signed an agreement to participate in a $4.5 billion green hydrogen commercialization project headed by Canada, amid the Canadian prime minister's three-day state visit to Korea celebrating the 60th anniversary of diplomatic relations between South Korea and Canada.
SK Ecoplant struck up a partnership with Canadian renewable energy company World Energy GH2 to participate in the first phase of the Nujio’qonik project -- a green hydrogen project scheduled to be carried out in eastern Canada to generate electricity through wind power and facilitate the production of green hydrogen.
SK Ecoplant said the project will be carried out on Newfoundland, an island in eastern Canada populated with power turbines that would allow for large-scale generation of electricity.
The project will center around performing electrolysis, a zero-emissions process in which electricity is split into hydrogen and oxygen.
The produced green hydrogen will then be processed to produce green ammonia, the final product of which will be exported to other continents, including Europe.
Additionally, the project will include the construction of green ammonia plants, which is expected to be able to process approximately 60,000 metric tons of green hydrogen into roughly 360,000 tons of green ammonia each year.
SK Ecoplant said it is expecting to win construction projects worth some $2 trillion by participating in the joint project with Canada. Discussions are underway for the company to undertake the engineering, procurement, and construction responsibilities of the wind farms in eastern Canada, it added.
Under the agreement, the company will make an investment worth $50 million in World Energy GH2 and take a 20 percent stake in the project.
SK Ecoplant said the company is expecting to produce green hydrogen by March 2025, and green ammonia, by March 2026.
“As the first Korean company to participate in an intercontinental green hydrogen commercialization project, we have gained a competitive advantage in acquiring diverse overseas business opportunities,” said SK Ecoplant CEO Park Kyung-il.
“SK Ecoplant’s rapid execution ability and extensive experience will help us become a prominent leader in the global green hydrogen and green ammonia market in the future,” he added.
The partnership comes as the country celebrates 60 years of relations with Canada. Canadian Prime Minister Justin Trudeau arrived in Korea on Tuesday -- the first Canadian leader to visit the country in nine years -- for a summit with President Yoon Suk Yeol.
At the summit, the Ministry of Trade and Innovation, Science and Economic Development Canada had signed a memorandum of understanding to fortify bilateral cooperation in clean energy, core minerals, and high-tech sectors.
"As Canada is a country rich in core minerals and has a free trade agreement with the United States -- making it an important country for (Korea's) response against US' Inflation Reduction Act -- the (memorandum of understanding) is expected to further advance inter-governmental cooperation in the core minerals sector and contribute to diversifying our industry's ability to procure core minerals," said an official from the Canadian Trade Ministry in a statement.
He added that as Canada has a strong ability to produce clean hydrogen, as well as a high demand for it, cooperation between Korean and Canadian energy companies will prove beneficial for both parties.
The South Korean Industry Ministry said it is planning on making an effort to initiate follow-up measures such as operating a full-fledged cooperation channel with Canada, in a bid to further cooperation between the two countries.
