S. Korea Wins Russia’s 3 Largest Projects Worth 6 Trillion Won

With the latest summit talks between Russian President Vladimir Putin and South Korean President Park Geun-hye, Korean companies have succeeded in winning Russia’s three largest projects worth 6 trillion won (US$5.37 billion), such as construction of fertilizer plants and ships and provision of technical advice for Russian shipyards.

A Cheongwadae spokesperson said on September 4 that the two heads of state held the summit at the Far Eastern Federal University in Vladivostok on the 3rd (local time). In particular, they reached an agreement that the two nations do not tolerate the North's self-proclaimed nuclear power and decided to further enhance strategic communication to resolve the issue.

For the country’s three largest projects, a consortium led by Hyundai Engineering and Hyundai Engineering & Construction with shares of 49 percent and 30 percent respectively signed a formal contract with NMFF, a wholly owned subsidiary of Russia’s National Chemical Group (NCG), as a preferred bidder for the construction of fertilizer plants worth US$5.1 billion (5.6 trillion won).

Hyundai Heavy Industries was also selected as a preferred bidder by Russia’s state-run shipbuilder Sovcomflot Group to build 12 oil tankers worth US$660 million (730 billion won).

In addition, DSEC, a subsidiary of Daewoo Shipbuilding & Marine Engineering, recently signed a memorandum of understanding (MOU) with a subsidiary of the Far Eastern Shipbuilding and Ship Repair Center (FESRC) for establishing a joint venture and providing technical advice to create the Zvezda Shipbuilding Complex.

With the summit meeting, the two leaders agreed to conclude the joint study for the free trade agreement (FTA) between Korea and the Russia-led Eurasian Economic Union (EAEU) and take follow-up measures for the negotiation as soon as possible. Accordingly, Korea and EAEU will begin the government-level FTA talks on October 5, bring the joint research to an end and discuss what procedures should take and when to start negotiation for the FTA.

Furthermore, the two countries signed a total of 24 MOUs for the US$395 million (441.2 billion won) Far East development project led by Korean firms.

The two heads of state agreed to strengthen strategic communication for the stability of the Korean Peninsula and Northeast Asia which is related with the U.S. deployment of the Terminal High Altitude Area Defense (Thaad) system in the South and nuclear program in North. “It is urgent to resolve North Korea’s nuclear and missile programs, which are great threats in the region, in order to expand cooperation between Korea and Russia further. To this end, we agreed to enhance strategic cooperation to address the issue,” President Park said in a joint press conference following the summit. Putin also said, "We had in-depth discussions about the current situation on the Korean Peninsula and reached an agreement that the two nations do not tolerate the North's self-proclaimed nuclear power."