SEOUL: Saudi Arabia on Thursday took advantage of a high-profile visit to South Korea by Crown Prince Mohammed bin Salman to sign contracts and preliminary agreements with Samsung, Hyundai Motor and other conglomerates for investments in the desert kingdom, including the massive NEOM smart city project.
Saudi Arabia’s ministry of investment signed a memorandum of understanding with Hyundai Rotem, a Hyundai Motor unit focused on railways and defence, to cooperate in building railways for NEOM – a futuristic, US$500 billion urban development project – as well as to develop hydrogen-powered trains.
Separately, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, agreed with construction and engineering company Samsung C&T, part of Samsung Group, to help build the kingdom’s new Qiddiya and Red Sea cities. Samsung C&T will use its state-of-the-art 3D modular construction engineering technology in those projects.
Neither the Saudi government nor the South Korean companies disclosed the value of the deals, but analysts quoted in local media say that each will amount to a few billion dollars.
In all, 26 deals were signed and also included conglomerate Lotte Group in chemicals and other companies in areas such as pharmaceuticals, video games and transportation.
Meanwhile, Saudi energy giant Aramco announced what it described as its “biggest ever investment” in South Korea through its S-Oil affiliate to develop a new petrochemical plant in the city of Ulsan. Aramco said in a news release that the project is valued at US$7 billion and is expected to be completed by 2026.
South Korea has a long history of doing business with Saudi Arabia, going back to construction projects built decades ago. Hundreds of thousands of South Koreans worked on those and other projects in the Middle East in the 1970s and 1980s, earning what were termed “oil dollars” for their families and hard currency for their country.
South Korean trade, industry and energy minister Lee Chang-yang said in a speech before the signings that the two countries are celebrating “60 years of diplomatic ties this year” and called for further cooperation “based on trust which we have built in the energy and construction sectors”.
The latest deals come as the Saudi crown prince, who also serves as prime minister but is seen as Saudi Arabia’s de facto ruler, was scheduled to hold talks and lunch with South Korean president Yoon Suk-yeol in Seoul.
“They may discuss a lot of issues, from Saudi’s NEOM city development project to nuclear power plants and defence,” said a high-ranking official with South Korea’s presidential office on Wednesday.
The Crown Prince, widely known as MBS, and Yoon both attended the Group of 20 summit this week in Bali, Indonesia. He plans to take part in the Asia-Pacific Economic Cooperation (APEC) forum leaders gathering in Thailand that begins Friday. South Korea will be represented by Prime Minister Han Duck-soo.
The Crown Prince is well known for travelling with a large number of officials, is staying at the Lotte Hotel in central Seoul, where the Saudi delegation has reportedly booked some 400 rooms.