Hyundai Heavy Industries Holdings, or HHIH, has signed a memorandum of understanding with Saudi Aramco on blue hydrogen and ammonia projects, a Hyundai Heavy official said March 4.

Hyundai Oilbank, the oil refinery unit of HHIH, will import LPG from Saudi Aramco under the MOU to convert into blue hydrogen, which is hydrogen produced from fossil fuel in a process that captures CO2 emissions.

"Carbon dioxide captured and stored during the hydrogen production process will be transported straight back to Saudi Aramco, which means there would be no carbon left in South Korea in the process," the HHIH official said.

The Saudi Arabian state-run oil company will use the CO2 to pump more oil out of the ground in a process for enhanced oil recovery, the official said.

Hyundai Oilbank plans to sell blue hydrogen to Aramco LPG for fuel electric vehicles or fuel cell power plants, or to use in desulfurization facilities, the official said, adding that the refiner plans to set up 300 hydrogen charging stations by 2040 across South Korea.