Qld-South Korea signs $20bn green ammonia deal

Brandon How

Queensland will export more than one million tonnes of green ammonia to South Korea annually by 2032 as three of the country’s largest conglomerates and Queensland-based Ark Energy embark on a $20 billion hydrogen and ammonia supply chain development project.

Ark Energy’s 3 gigawatt Collinsville Green Energy Hub, which is still under development, will support the green hydrogen and ammonia supply chain project.

The firm has already signed with 12 landholders around Collinsville to operate on an area of around 190,000ha. Before exports begin in 2032, a construction phase of around four years will take place after two years are taken to reach final investment decisions.

The Han-Ho (short for Korea-Australia) Hydrogen Consortium was launched on Wednesday with Queensland Premier Annastacia Palaszczuk in attendance at the signing of the memorandum of understanding. The MoU involves Ark Energy’s parent company Korea Zinc, petrochemicals business Hanwha Impact, and SK Gas, which has the largest market share for Korean domestic liquified petroleum gas.

Ark Energy CEO Daniel Kim, Hanwha Impact’s Ray Yea, Queensland Premier Annastacia Palaszczuk,  Energy Minister Mick de Brenni, Korea Zinc’s KD Park, and SK Gas vice-president Cheong-Seok Ko.

SK Gas will also contribute to the construction of export terminal infrastructure, shipping solutions, and the import terminal infrastructure on the Korean side.

South Korea is currently the third largest importer of ammonia with demand expected to exceed 31 million tonnes by 2030, according to the Korea Institute of Energy Research.

Premier Palaszczuk said that the launch of the Han-Ho consortium was an important step in transforming the state into a hydrogen powerhouse.

“We welcome this major new Consortium to Queensland – to accelerate progress in our green hydrogen industry and advance green energy exports to Korea. Korea is Queensland’s third-largest two-way trading partner and one our largest sources for foreign investment,” the Premier said.

“The world’s largest zinc producer Korea Zinc is a longstanding important contributor to our regional economy, and through the Sun Metals Corporation, is the largest private sector employer in North Queensland. Now, its subsidiary Ark Energy is not only helping Korea Zinc to decarbonise and produce green zinc – it’s transforming North Queensland into a hydrogen powerhouse.

Ark Energy chief executive Daniel Kim said the company will leverage its local knowledge and renewable energy pipeline of about 9GW in leading the consortium.

“Strategic partnerships will be essential to building a new green ammonia supply chain from Queensland to Korea and we are delighted that Korea Zinc, Hanwha Impact and SK Gas have decided to join our Consortium,” Mr Kim said.

Ark Energy was launched in January 2021 and is currently developing the first phase of its SunHQ hydrogen production facility adjacent to Korea Zinc’s Sun Metals zinc refinery in Townsville. It will have a capacity of 155 tonnes.

In its Hydrogen Industry Strategy 2019-2024, the state government estimates that hydrogen exports will be worth $1.7 billion annually by 2030.

The launch of the consortium follows the final investment decision last Friday that Australia’s first renewable hydrogen facility supporting the production of renewable ammonia. The project received a $47.5 million grant from the Australian Renewable Energy Agency and a $2 million grant from the Western Australian government.

At the federal level, the previous Coalition government finalised a $100 million clean energy technologies and critical minerals partnership in December 2021. The investment commitment would be shared by Australia and South Korea. It was a part of the government’s larger $565.8 million international low technology partnerships scheme.

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