Hanwha and Baker Hughes Enter into Joint Development Agreement for Ammonia Gas Turbines

Rhea-AI Summary

Hanwha Power Systems and Hanwha Ocean have signed a Joint Development and Collaboration Agreement with Baker Hughes (NASDAQ: BKR) to design and produce low carbon ammonia gas turbines. The collaboration aims to develop turbines capable of 100% ammonia combustion and dual fuel operation with natural gas-ammonia blend.

The project builds on Baker Hughes' proven small-size turbine technology and PSM's newly-developed ammonia combustion system. Hanwha Group plans to complete the development of LNG carriers and container ships using this ammonia gas turbine propulsion system by 2028. In September 2023, the companies received approval in principle from ABS for applying ammonia gas turbines to LNG carriers.

PSM completed initial high-pressure ammonia combustion testing and Baker Hughes finished turbine feasibility studies in 2024. The initiative supports Hanwha Group's vision, announced at Davos Forum, to create the world's first fossil fuel-free ship.

Positive

• Development of innovative 100% ammonia-powered turbine technology for marine applications
• Strategic partnership with major energy technology company Baker Hughes
• Received ABS approval in principle for ammonia gas turbines in LNG carriers
• Successful completion of initial high-pressure ammonia combustion tests
• MOU signed with major European LNG carrier shipping company for propulsion system conversion

Negative

• Technology still in development phase with completion targeted for 2028
• Requires significant R&D investment and testing before commercial deployment

Insights

Energy Technology Analyst

This strategic partnership between Baker Hughes and Hanwha marks a pivotal advancement in maritime decarbonization technology, with substantial commercial implications. The development of 100% ammonia-capable gas turbines addresses a critical gap in the $150 billion maritime propulsion market, particularly as shipping companies face intensifying regulatory pressure to reduce emissions under IMO 2050 guidelines.

Several key technological and market advantages emerge from this collaboration:

• The dual-fuel capability (ammonia/natural gas blend) provides important operational flexibility during the transition period, reducing adoption risks for shipowners
• Baker Hughes' proven small-size turbine technology combined with PSM's ammonia combustion expertise creates significant barriers to entry for competitors
• The 2028 development timeline aligns strategically with major fleet renewal cycles and regulatory deadlines

The successful completion of high-pressure ammonia combustion tests and preliminary ABS approval significantly de-risks the project. The existing MOU with a major European LNG carrier operator suggests strong commercial interest, potentially leading to substantial order flow. This positions Baker Hughes to capture a significant share of the maritime propulsion market transformation, estimated to require over $2 trillion in investments by 2050.

The partnership's focus on LNG carriers is particularly strategic, as this segment faces intense pressure to address the paradox of transporting cleaner fuel while using conventional propulsion. Success in this high-value market could accelerate adoption across other vessel categories, establishing Baker Hughes as the premier provider of clean maritime propulsion technology.

Environmental Policy Analyst

This joint development agreement positions Baker Hughes at the intersection of two critical environmental imperatives: maritime decarbonization and green ammonia infrastructure development. The timing is particularly significant as the International Maritime Organization's stringent 2050 emissions targets require substantial technological innovation in hard-to-abate sectors.

The regulatory landscape strongly favors this initiative:

• The EU's inclusion of maritime emissions in its carbon trading scheme from 2024 creates immediate market pull
• The IMO's revised strategy requiring 20-30% emissions reduction by 2030 and net-zero by 2050 establishes clear market guardrails
• Regional port authorities' increasing emissions restrictions create near-term adoption drivers

Baker Hughes' strategic focus on ammonia aligns with the projected 500% growth in green ammonia production capacity by 2030. The dual-fuel capability provides a practical transition pathway, addressing both immediate compliance needs and long-term zero-emission goals. This positions the company to benefit from both the $80 billion maritime propulsion market and the broader green ammonia infrastructure buildout.

• Hanwha Power Systems and Hanwha Ocean cooperate with global energy technology company Baker Hughes.
• Leading the decarbonization of the hard-to-abate marine transportation sector through fuel-flexible combustion technology.

SEOUL, South Korea, Feb. 3, 2025 /PRNewswire/ -- With the goal of completely carbon-free operation of ships, Hanwha Power Systems and Hanwha Ocean (KRX: 042660) signed a Joint Development and Collaboration Agreement with Baker Hughes (NASDAQ: BKR), a global energy technology company, to design and produce low carbon ammonia gas turbines during the Baker Hughes Annual Meeting 2025 held in Florence, Italy on February 2-4.

Hanwha Group declared its vision for the world's first fossil fuel-free ship at the Davos Forum held in Switzerland in January last year. Hanwha Group plans to complete the development of liquefied natural gas carriers and container ships using the ammonia gas turbine propulsion system by 2028.

The ammonia gas turbine to be developed through this collaboration will be based upon the proven, small-size world class turbine technology of Baker Hughes, and a newly-developed ammonia combustion system created by PSM, a US-based Hanwha subsidiary. The gas turbine will be capable of 100% ammonia combustion, and dual fuel operation with a natural gas and ammonia blend. It is expected to be a game-changing technology for large ship owners, enabling a completely carbon-free mode of propulsion. In September 2023, Hanwha Power Systems and Hanwha Ocean obtained approval in principle (AIP) from the American Bureau of Shipping (ABS) to apply ammonia gas turbines to LNG carriers.

PSM successfully completed an initial high-pressure ammonia combustion test campaign and Baker Hughes completed its initial turbine feasibility studies in 2024. In addition, Hanwha Power Systems signed a memorandum of understanding (MOU) at Gastech 2024 in Houston, U.S., in September last year with a large liquefied natural gas carrier shipping company in Europe to convert its propulsion system to an ammonia gas turbine based system.

Through this joint development agreement, Hanwha plans to expand technological cooperation with the goal of developing the world's first completely carbon-free ship and provide innovative solutions that lead the era of fossil fuel elimination.

Executive Director Kim Hyeong-seok, head of Hanwha Power Systems' Marine Solutions Business Department, said, "The paradigm of switching to lower carbon fuel for ships is the calling of the times, and Hanwha Power Systems will continue to lead the development of innovative technologies for the entire life cycle of eco-friendly ships."

"This collaborative development of a low-carbon ammonia gas turbine will be a significant turning point in the global shipbuilding and shipping industry, accelerating the transition to eco-friendly fuel propulsion for ships," said Son Young-chang, vice president and head of Hanwha Ocean's Product Strategy Technology Institute.

Baker Hughes is a global energy technology company operating in more than 120 countries around the world, with a unique strength in small and medium-sized gas turbine technology. The synergy between the two companies is highly anticipated.

About Hanwha Power Systems

Hanwha Power Systems is a global leader in eco-friendly energy equipment and provides the highest quality products and services by possessing the original technology for the design and production of high-speed rotating equipment. In addition to our 100% oil-free compressor made with our own technology, we have recently been developing solutions for various energy equipment such as sCO2 and hydrogen turbines. In particular, we aim to lead a paradigm shift in the shipping sector by developing technologies to decarbonize the maritime industry.

About Hanwha Ocean

Hanwha Ocean is a leading global company with extensive expertise and experience in the shipbuilding and offshore industry. Boasting the world's most competitive LNG carriers built with eco-friendly and highly efficient technology, the company has continuously pioneered new businesses since 1973, producing a vast range of vessels, including commercial ships, drill ships, and warships. Hanwha Ocean will be at the forefront of pioneering advanced marine solutions for decarbonization and further expand Hanwha's green energy ecosystem to create positive, sustainable change worldwide. More information about Hanwha Ocean is available at www.hanwhaocean.com.

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SOURCE Hanwha Power Systems

FAQ

What is the timeline for Hanwha and Baker Hughes (BKR) to complete their ammonia-powered ships?

Hanwha Group plans to complete the development of LNG carriers and container ships using the ammonia gas turbine propulsion system by 2028.

What type of approval did Hanwha and Baker Hughes (BKR) receive for their ammonia gas turbines?

In September 2023, they received approval in principle (AIP) from the American Bureau of Shipping (ABS) to apply ammonia gas turbines to LNG carriers.

What are the key features of the Baker Hughes (BKR) ammonia gas turbine technology?

The gas turbine will be capable of 100% ammonia combustion and dual fuel operation with a natural gas and ammonia blend, based on Baker Hughes' proven small-size turbine technology and PSM's ammonia combustion system.

What testing has been completed for the Baker Hughes (BKR) ammonia gas turbine project?

PSM successfully completed an initial high-pressure ammonia combustion test campaign and Baker Hughes completed its initial turbine feasibility studies in 2024.