The Saudi Arabian Oil Company (Aramco) has announced the signing of one agreement and nine Memorandum of Understanding (MoUs) with leading South Korean entities.
The deals apparently aim to advance Aramco’s downstream strategy and support the development of low-carbon energy solutions.
They are also expected to create new financing options for the world’s largest oil and gas company, official sources have said.
The agreements were announced on the sidelines of a meeting between Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud and South Korean President Moon Jae-in.
The signings took place at the Saudi-Korean Investment Forum in Riyadh, an event hosted by Saudi Arabia’s Ministry of Investment.
In attendance were Aramco President & CEO Amin H Nasser and senior corporate executives from both countries.
Aramco signed an agreement with South Korea’s Doosan Heavy Industries & Construction Company and the Saudi Arabian Industrial Investments Company (Dussur).
This partnership will reportedly look to establish a casting and forging facility to supply Saudi manufacturers with industrial and process equipment such as valves, pumps, compressors, wellheads, flanges, heat exchangers, and gas and wind turbines.
The planned joint venture has a production target of 60,000 tons per year, primarily from sand-casting and open-die forging processes.
It also apparently has the potential to supply original equipment manufacturers (OEMs) in the rig, drilling, maritime, and engine fields, with the possibility of expanding to the wider GCC market.
The agreements also include MoUs with Korean energy companies KEPCO, S-Oil, POSCO, Hyundai Oilbank, H2Korea, and Lotte Chemical to explore potential collaboration in the supply, transportation, utilization, and certification of hydrogen and ammonia.
The companies also plan to study the feasibility of converting exported ammonia into hydrogen — a process known as ammonia back-cracking.
This apparently represents a first step towards a potential large-scale production facility for hydrogen and ammonia in Saudi Arabia, which would also include a Carbon Capture and Storage (CCS) facility.
Aramco also signed a Heads of Terms agreement with the Export-Import Bank of Korea (K-EXIM) to explore strategic financing solutions in support of its business and investment activities involving Korean companies.
