A POSCO-led consortium has won a $6.7bn contract to produce green hydrogen in Duqm, Oman, sources told news agency the Korean Economic Daily.
The prospective green hydrogen project will be the largest in the world. The South Korean steelmaker POSCO Group holds a 28% plurality share in the consortium’s venture.
In March 2022, POSCO stated that Oman was one of the countries it was considering for hydrogen investment, and the country’s officials met with POSCO earlier in 2023.
Samsung Engineering will manage the project’s engineering, procurement and production phases. The consortium includes a 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.
Omani authorities, including the country’s energy minister, will sign the deal with the consortium on 21 June. The Korea Economic Daily reports that negotiations between the consortium partners regarding the project are ongoing.
The deal is the latest move from POSCO to invest in green hydrogen production. This month, the company has begun operations on a new facility to produce hydrogen-based green steel, the Pohang steel complex. With construction scheduled for completion in 2026, the factory will produce 300,000 tonnes per year of hydrogen-based steel for various uses including heavy industry.
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Pohang steel complex will be the world’s first steel plant to use fluidised bed reduction reactors in its production. The HyREX (Hydrogen Reduction) technology produces direct reduced iron with hydrogen, which is then melted in an electric furnace to create steel without carbon emissions.
This is because the fluidised bed reactor, unlike traditional furnaces, separates the reduction and melting processes. This allows POSCO to reduce the steel with hydrogen, emitting water vapours instead of carbon dioxide before the melting process occurs separately. Similarly, the production process is more efficient because HyRex can use mined ore without POSCO having to pelletise it.