● S-OIL bought a 20% stake in solid oxide fuel cell (SOFC) developer Fuel Cell Innovations in a strategic partnership. 
● The refiner’s entry into a new business is aimed at future growth; its green energy investment will contribute to achieving carbon neutrality.

S-OIL (CEO Hussain Al-Qahtani) is set to charge into the hydrogen business by investing in a company making next-generation fuel cells, a key component in the hydrogen economy.

The refiner said on Mar. 7 that it sealed an investment agreement with Fuel Cell Innovations (FCI) (Representative Director Lee Tae-won), which provides fuel cell-based clean energy solutions. It will become FCI’s largest domestic shareholder by acquiring a 20% stake with initial investment. The two entities will establish a strategic alliance to accelerate their foray into the hydrogen business.

“This investment heralds our full-fledged foray into the hydrogen economy and it is anticipated to drive S-OIL’s sustainable growth,” said CEO Al-Qahtani. “Our company will also vigorously join hands in the government’s endeavor to cut carbon emissions.” 

FCI, a joint venture company between Korea and Saudi Arabia with some 40 SOFC patents, has built tie-ups with various companies and research institutes. It collaborated with Italy’s fuel cell maker Solid Power to develop products tailored to Korea and overseas markets as part of efforts to seek open innovation. S-OIL’s investment will set the stage for FCI to establish production facilities with an over 100MW capacity by securing investments amounting to up to 100 billion won by 2027 and to widen its business portfolio to include green hydrogen. 

■ S-OIL will team up with FCI to make inroads into overseas markets, including the Middle East.

FCI and S-OIL are also looking to advance into overseas markets, including the Middle East. In particular, they are planning to supply products to Saudi electricity and telecom companies through a partnership with FCI’s Saudi partner. Currently, FCI is developing products customized for power plants and buildings that suit climate conditions of the Middle East market in compliance with the country’s regulations, based on its first 150MW fuel cell supply contract with its Saudi partner. It is also developing together with leading institutes, offshore fuel cells applicable to vessels and combination products for micro-grids that can complement the intermittent output of renewables.

"The Middle East market is attractive because it can reach grid parity without government subsidies due to its high competitiveness in gas prices, and we will push for localization of major components by 2027 to strengthen our business competitiveness” said FCI Representative Director Lee Tae-won. “We are looking forward to synergy of business with S-OIL"

Fuel cells are devices that produce electricity by causing chemical reaction between hydrogen and oxygen in the air and are one of the key components in the hydrogen economy. As they are more energy-efficient than thermal plants, have no chemical combustion reaction and reduce GHGs, they are catching attention as a green energy source. In particular, SOFCs, which function at the highest temperature, are more power-efficient than existing fuel cells and are small in size. For these reasons, they are useful for houses, buildings and power plants and are gaining ground for their high usefulness.

■ S-OIL is seeking to make headway into all areas of the hydrogen industry.

S-OIL is strongly considering its advance into new businesses such as fuel cells and recycling while at the same time maximizing the profitability of its existing businesses ? refining, petrochemical, and lube oil businesses ? in order to achieve its new growth strategy, “Vision 2030.”

In particular, it is also mulling its foray into overall hydrogen areas ranging from production to distribution and sales as one of its new growth engines. To this end, S-OIL is considering projects using green hydrogen/ammonia and liquefied hydrogen production/distribution projects through cooperation with Saudi Aramco, a major shareholder. Also, S-OIL participated in Korea Hydrogen Energy Network (Kohygen), a special purpose company joined by relevant companies, to build hydrogen fueling infrastructure for buses and trucks and is reviewing the adoption of hybrid hydrogen fueling stations in downtown Seoul.