Saudi Aramco Makes Billion Dollar Deals in South Korea
Saudi Aramco and its affiliates have signed 12 agreements with major South Korean companies to expand Arabian crude oil supply to Asian markets and strengthen the company's chemical processing operations.
An agreement between Saudi Aramco, Hyundai Heavy Industries (HHI) and the Saudi Arabian Industrial Investments Company (Dussur) will establish a engine manufacturing joint venture with a manufacturing and after sales facility to be set up in Saudi Arabia. Under the partnership, Saudi Aramco will own 55 percent of the JV, while HHI and Dussur will own 30 percent and 15 percent respectively.
An MoU between Saudi Aramco and HHI extends the companies' existing collaboration in shipbuilding. Additionally, HHI will increase its equity share in International Maritime Industries (IMI) from 10 to 20 percent. IMI is a joint venture between Saudi Aramco, HHI, Lamprell and Bahri, and another MoU will further cooperation on shipbuilding and transport between the companies.
Saudi Aramco also signed an MoU with S-Oil, South Korea's third-largest refiner, for a $6 billion steam cracker and olefin downstream project which is expected to be completed by 2024. The new steam cracker will produce ethylene and other basic chemicals out of naphtha and refinery off-gas. This new agreement supports Saudi Aramco’s plan to increase its global petrochemicals footprint over the next decade. It will further include the deployment of Saudi Aramco’s thermal crude-to-chemicals technology, shifting S-Oil’s focus from oil to chemicals, a move Saudi Aramco says will better position the company in the future energy market. Aramco Overseas Company is a major shareholder in S-Oil.
An MoU between Saudi Aramco and Korea National Oil Corporation will allow Saudi Aramco to explore the potential for crude oil storage in South Korea.
Saudi Aramco also signed agreements with Hyundai Oilbank, Hyosung, GS Holdings, Daelim Industrial, the Hyundai Motor Group and others as part of Saudi Arabia's Vision 2030 to reduce national dependence on energy.
The MoUs were signed during a visit to South Korea by Crown Prince Mohammed bin Salman. They have an estimated value of $8.3 billion.