Saudi, Korean firms sign multiple business deals as countries partner on developing hydrogen economy

SEOUL: Saudi Arabia and South Korea agreed to work together in developing the hydrogen economy, President Moon Jae-in’s office said, after the Korean leader’s meeting with Saudi Crown Prince Mohammed bin Salman.

“After holding the talks at Al-Yamamah palace in Riyadh, the two nations signed preliminary deals to jointly develop green hydrogen, which is produced from renewable energy sources, especially solar and wind, and jointly build a hydrogen ecosystem,” Moon’s office said in a statement.

Under the deals, Seoul will be able to secure carbon-neutral hydrogen and ammonia supplies from the Kingdom. It will also help Riyadh operate hydrogen-powered cars and hydrogen fueling stations.

Moon is on the second leg of his trip to the Middle East with economic diplomacy, artificial intelligence, public health and energy cooperation high on the agenda.

On Wednesday, Moon is scheduled to meet Gulf Cooperation Council Secretary-General Nayef bin Falah Al-Hajjraf to discuss a free trade agreement between Seoul and the GCC.

Saudi-Korea business forum

After the talks with the Crown Prince, the South Korean president delivered a keynote speech at a business forum in Riyadh.

“Saudi Arabia, which has the potential to produce clean hydrogen such as green and blue hydrogen, and South Korea, which has strengths in hydrogen utilization based on hydrogen-powered cars and fuel cell technology, must closely cooperate to lead the global hydrogen economy,” Moon said, as quoted by South Korea’s main news service Yonhap News Agency.

The Saudi-Korean Business Forum culminated today in 13 investment agreements in such areas of strategic interest as clean energy and manufacturing, smart infrastructure and digitalization, capacity building, SMEs, healthcare and life sciences.

The Public Investment Fund and Aramco signed many deals with leading Korean companies including Posco, in which the PIF owns a 38-percent stake.

Saudi Investment Minister Khaled Al-Falih and Korean Trade, Industry and Energy Minister Moon Sungwook held a meeting for the Saudi-Korean Vision 2030 committee, SPA said.

The committee was created in 2017 to harness complementary resources to generate economic benefits and business opportunities in line with Saudi Arabia’s Vision 2030 and Korea’s Five-Year (2017-2022) Plan for the Administration of State Affairs.

Deals

• Saudi Ministry of Investment signed an agreement with Samsung C&T to help it develop and localize industries related to construction technologies and green products and around investing in building and financing infrastructure projects.
• The PIF signed an MoU with Korean firms POSCO and Samsung C&T to study and develop a green hydrogen production project in KSA for export purposes, while MISA signed a joint cooperation with Samsung C&T in the field of green hydrogen for pre-cast concrete blocks and infrastructure.
• Saudi Aramco signed an MoU with Korea Electric Power Corporation, KEPCO, for a pre-feasibility study on blue ammonia and blue hydrogen for investment, production, logistics and sales, an agreement with POSCO regarding investment in blue ammonia and blue hydrogen and a basic terms agreement with Export-Import Bank of Korea for framework agreements that include a credit limit of up to $6 billion. Saudi Aramco also signed a series of agreements with S-Oil around areas including research and development, blue hydrogen and technology development.
• The Saudi Arabian Industrial Investments Co. (Dussur), Saudi Aramco and Doosan Heavy Industries and Construction signed an agreement to establish a high-efficiency factory in iron molding and forging in Ras Al-Khair, with a production capacity of 83,000 tons annually. The deal is expected to attract foreign investment, transfer quality technology to Saudi Arabia and localize supply chains for strategic sectors in the equipment industry for the oil and gas, water, energy and marine industries.
• Saudi real estate developer ROSHN and Samsung C&T agreed to establish a non-exclusive framework to jointly explore opportunities in housing development and pre-cast concrete blocks.
• The Korean Intellectual Property Office and the Saudi Authority for Intellectual Property (SAIP) signed advanced partnership arrangements for bilateral cooperation, including the secondment of Korean experts to SAIP
• The Ministry of National Guard signed a letter of intent agreement with EzCaretech to jointly provide and implement Dr. Answer – an artificial intelligence-based medical solutions tool – within targeted hospitals.
• Kumho Tire and Al-Sahm Al-Usud for Tires signed a technical partnership agreement to establish a factory for tire production. The factory’s production capacity will reach 15 million tires annually, and production is expected to start in the third quarter of 2023.

Saudi-Korea trade

Saudi Arabia is South Korea’s top economic and trade partner in the Middle East, contributing over 30 percent of Seoul’s total crude oil imports in 2021, according to data by the Korea International Trade Association.

The Kingdom and the Republic of Korea have a long history of partnership, beginning with the establishment of diplomatic relationships 60 years ago. This relationship has benefitted both countries economically, with bilateral trade increasing from $3.9 billion in 1980 to $25.5 billion in 2019.

Earlier this month, South Korea’s Industry Minister Moon Sung-wook met Saudi Arabia’s Energy Minister Abdulaziz bin Salman in Riyadh for talks on cooperation in nuclear power and other energy fields in transition to a low carbon economy.

So far, joint Saudi-Korean projects amount to 120 with a value of around $1 billion, of which 20 percent are industrial projects.

Trade exchange between both countries has increased by 66 percent during the third quarter of 2021, compared to the same period last year, jumping to SR27.7 billion ($7 billion), according to SPA.  

UAE-Korea cooperation

The trip to Saudi Arabia follows Moon’s four-day visit to the UAE that included the signing of a $3.5 billion to sell Korean surface-to-air missiles KM-SAM, known as Cheongung II.

In addition to the arms export deal — the largest such agreement in South Korea’s history — Abu Dhabi and Seoul agreed to expand their cooperation in the development of carbon-capture technologies to create what is known as blue hydrogen, as the East Asian nation seeks to achieve carbon neutrality by 2050.

Blue hydrogen is obtained from natural gas in a process that stops carbon emissions from being released into the atmosphere.