S Korea, Saudi Arabia firms sign 46 pacts, includes blue ammonia project

SINGAPORE (ICIS)–South Korea and Saudi Arabia firms have inked 46 memorandums of understanding (MoU) and joint partnerships, including clean energy-related investments and a new vehicle manufacturing plant to be built in the Kingdom.

The agreements were signed at the Saudi 2023 Korea-Saudi Investment Forum held in Riyadh, Saudi Arabia, in conjunction with South Korean President Yoon Seok-yeol’s state visit to the Kingdom on 21-24 October.

“The two sides welcomed the interest of companies from both sides for mutual investments in Saudi Arabia and Korea, especially in the fields of energy, refining, petrochemicals, and developing innovative technologies for the uses of hydrocarbon resources,” South Korea’s Office of the President said in a statement on Monday.

The construction of Shaheen, a $7bn petrochemical joint venture crude-to-chemicals project by S-Oil in Ulsan, “is progressing smoothly following the groundbreaking ceremony successfully held in March”, it said.

S-Oil is over 63%-owned by Saudi Aramco through its subsidiary Aramco Overseas Co.

On the energy front, state-owned Korea National Oil Corp (KNOC) has signed an agreement to import 4.3m barrels of Saudi Aramco’s crude into South Korea and store it at the firm’s stockpile base in Ulsan.

The two companies aim to create a joint crude oil reserve of 5.3m barrels in Ulsan by 2028.

Separately, Korea Electric Power Corp, steelmaker POSCO Holdings and Lotte Chemical have signed a letter of intent (LOI) with Saudi Aramco for a $15bn blue ammonia production project.

As for manufacturing, Saudi Arabia’s Public Investment Fund (PIF) and South Korean carmaker Hyundai Motor Co have signed a joint venture deal to establish a new vehicle manufacturing plant in Saudi Arabia.

The total investment cost for the project is expected to exceed $500m and will manufacture both internal combustion engines and electric vehicles.

Thumbnail photo: South Korean President Yoon Suk Yeol giving a speech at King Saud University in Riyadh, Saudi Arabia, 23 October 2023. (Source: YONHAP/EPA-EFE/Shutterstock)

Focus article by Nurluqman Suratman