Leaders of South Korean conglomerates gathered for a meeting with Saudi Arabia Crown Prince Mohammed bin Salman at Cheong Wa Dae on Wednesday to forge partnerships with the oil-rich country, which has been looking to curb its export reliance on fossil fuels through technological breakthroughs and capital inflow.
During a private luncheon at the presidential house, chiefs of the country’s major conglomerates sought to strengthen business cooperation with the Middle Eastern country to revitalize the manufacturing and energy sectors.
The South Korean business tycoons included Samsung Electronics Vice Chairman Lee Jae-yong, Hyundai Motor Group Executive Vice Chairman Chung Euisun, SK Group Chairman Chey Tae-won, LG Group Chairman Koo Kwang-mo and Hyosung Group Chairman Cho Hyun-joon.
Marking the crown prince’s first visit to Korea, government officials and business leaders from the two countries signed 10 memorandums of understanding, worth around $8.3 billion, according to the Ministry of Industry, Commerce and Energy.
At the ministry-level, Energy Minister Sung Yoon-mo and his Saudi Arabian counterpart Khalid Al-Falih signed two MOUs for mutual cooperation in the development of green vehicle technology and building of infrastructure for hydrogen energy.
Officials expect the partnership in hydrogen development to pave the way for Korean companies, such as Hyundai Motor, in making inroads into the Middle East.
“The MOUs are likely to help Korean businesses enter the market in the field of fuel cells, energy supply chain of hydrogen as well as eco-friendly and combustion engine vehicles,” the ministry said.
Hyundai Motor Group Executive Vice Chairman Chung Euisun (left) and Saudi Aramco CEO Amin H. Nasser sign a memorandum of understanding on development of hydrogen vehicles on Tuesday in Seoul. (Hyundai Motor)
On the eve of the crown prince’s visit to Seoul, Hyundai Motor signed an MOU with Saudi Aramco, the world’s biggest oil company, to expand the hydrogen ecosystem and promote awareness of hydrogen as a clean energy source in Korea and Saudi Arabia. They also agreed to explore the use of advanced nonmetallic materials, such as carbon fiber and carbon fiber-reinforced plastic in automobiles.
“The collaboration of Hyundai Motor and Aramco will accelerate progress toward a hydrogen society by expanding access to a robust infrastructure and fuel cell electric vehicles,” said Executive Vice Chairman Chung of
Hyundai Motor, adding he hoped this would be an opportunity for the two companies to expand further strategic cooperation.
It has been reported that Aramco is investigating the potential of hydrogen as a future business area. Last week, the oil company opened its first hydrogen fueling station in Dhahran Techno Valley, in the heart of the kingdom’s oil producing region.
A gas unit under SK Group also signed two nonbinding MOUs with Advanced Global Investment, a subsidiary of Advanced Petrochemical of Saudi Arabia, for building a petrochemical plant in Jubail in the Middle Eastern country.
South Korean shipbuilder Hyundai Heavy Industries also signed an MOU with Aramco for a joint venture to build a plant for ship engines and increase HHI’s shares in International Maritime Industries, developer of the latter’s new maritime yard, from 10 percent to 20 percent.
Textile giant Hyosung also agreed with Aramco to build manufacturing facility of carbon textile in Saudi Arabia while GS Holdings, holding company of Korean oil refiner GS Caltex, signed an MOU to explore investment opportunities in the Middle Eastern country.
Later in the afternoon, President Moon and the crown prince attended an inauguration ceremony for S-Oil’s new petrochemical complex, a 5 trillion won plant dubbed as the future business of the oil refinery company. Aramco is the largest shareholder of S-Oil.
The plant converts low value residue oil to gasoline and propylene, marking “an innovation transformation for S-Oil,” the company said.
The project was the first mega-scale investment since Aramco became the majority shareholder of S-Oil. The two companies signed a separate memorandum to invest 7 trillion won in S-Oil’s operation in South Korea in the future.
“These two new facilities will supply high-value products to major Korean industries, whose global brands are part of our everyday lives and rank among the world’s very best in technology, innovation, creativity, and quality,” said Aramco President and CEO Amin H. Nasser.
Saudi Arabia is Korea’s biggest trading partner in the Middle East and the No. 1 crude oil exporter to Asia’s fourth-largest economy.
By Cho Chung-un (firstname.lastname@example.org)