During President Yoon Seok-yeol’s state visit to Saudi Arabia, a total of 46 memoranda of understanding (MOUs) and contracts were signed at the 2023 Korea-Saudi Investment Forum. This signifies a boost in economic cooperation between the two nations across various industries, including electric vehicles and clean hydrogen.
According to the Ministry of Trade, Industry, and Energy, on Oct. 22 (local time) in Riyadh, 40 MOUs and 6 contracts were signed in the presence of Minister Bang Ki-sun from the Korean Ministry and Minister Khalid Al Falih from the Saudi Investment Ministry. The forum was co-hosted by the Korea Business Federation and the Saudi Investment Ministry.
The MOUs and contracts signed on that day span across multiple sectors including clean energy, electric cars, and smart farms. In the energy and power sector, achievements include joint oil stockpiling and joint bid participation with a total of 7 items. Notably, KEPCO, POSCO Holdings, and Lotte Chemical signed a Letter of Intent (LOI) with Saudi Aramco to produce blue ammonia at a project cost of US$15.5 billion. This is part of the “Korea-Saudi Hydrogen Oasis Cooperation Initiative,” which the governments of the two countries have agreed upon to expand mutual cooperation in the clean hydrogen field. Saudi Arabia, a resource-rich nation, has been expanding its investment in the clean hydrogen industry as a response to carbon neutrality and to develop future energy sources.
Additionally, HD Hyundai Oilbank and Saudi Aramco signed an MOU for cooperation in the clean hydrogen energy business. KEPCO and Saudi Aljomaih Energy have decided to collaborate on a hydrogen project. Korea National Oil Corporation signed a joint oil stockpiling contract with Aramco. Accordingly, under normal circumstances, Aramco will store crude oil at Ulsan storage base and sell it domestically and internationally. In case of an emergency in Korea’s oil supply situation, Korea will have the priority to purchase up to 5.3 million barrels of Aramco’s crude oil.
In the infrastructure and plant sector, 8 projects were conducted. Hyundai E&C and the Saudi Investment Ministry signed an MOU for cooperation in real estate and infrastructure investment. This also includes desalination projects to supply water from the desert and collaborative projects for smart cities such as Neom City.
Advanced industry and manufacturing cooperation will also be strengthened. Hyundai Motor Group and Saudi’s Public Investment Fund (PIF) signed a contract to establish a joint venture factory for the production of 50,000 internal combustion and electric vehicles annually. If the contract proceeds smoothly, it implies the potential establishment of Korea’s first automobile factory in the Middle East.
Moreover, following the 2022 Korea-Saudi Investment Forum held in November last year, BMT Co., Ltd. signed a contract with a Saudi company to establish a joint venture for the localization of fittings and valve manufacturing. Including this, a total of 19 MOUs and contracts were conducted in the advanced industry and manufacturing sectors for electric vehicle charging, factory technology transfer, and more.
Promising new industries have set the stage for 10 cooperative ventures. Notably, Nongshim and other Korean companies have signed MOUs with Saudi Greenhouse for the construction of smart farms. Both countries also partnered in fields of biotechnology, sports business, and robotics. Additionally, in the financial sector, the Korea Trade Insurance Corporation (K-SURE) and Saudi Aramco signed a cooperative memorandum worth US$3 billion to support the order of Aramco projects by Korean companies.
On the same day, the Korea-Saudi Trade Consultation hosted by the Ministry of Industry at the Riyadh Fairmont Hotel saw participation from 108 companies from both countries. This event was aimed at matching advanced and new industrial companies from Korea interested in entering Saudi with Saudi clients, aiming to drive business results. Among these, 190 one-on-one consultations were conducted between 30 medium and small Korean companies and 78 Saudi buyers and investors.
According to the Korea Trade-Investment Promotion Agency (KOTRA), preliminary figures from the event indicate that contracts worth more than US$21 million are in the pipeline, with a possible conclusion within a year. These include new industries (US$146.6 million), energy, construction, and plants (US$3.5 million), industrial equipment (US$3 million), and defense and security (US$500,000). The Ministry and KOTRA plan to provide follow-up support centered on KOTRA’s headquarters and the Riyadh Trade Office to ensure these lead to actual export contracts or investment projects.