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South Korea to build $6.5bn Saudi hydrogen plant with PIF

Saudi Royal Court/Handout via REUTERS
South Korean President Yoon Suk-yeol is scheduled to hold talks with Crown Prince Mohammed on November 17, 2022

Korea Electric Power Corp and others on Thursday signed a memorandum of understanding with Saudi Arabia’s Public Investment Fund (PIF) to build and operate a hydrogen and ammonia production plant in Saudi Arabia, three people told Reuters.

The project will be worth about $6.5 billion, said one of the people, who declined to be identified as they were not authorised to speak with media on the matter.

The initial agreement coincides with Saudi Arabian Crown Prince Mohammed bin Salman’s visit to South Korea.

The project built over 2025-2029 will span 396,694 square metres in Yanbu, Saudi Arabia, produce 1.2 million tonnes of green hydrogen and ammonia annually for 20 years, and be worth about $6.5 billion, Yonhap news agency reported earlier on Thursday, citing industry sources.

Korea Electric Power Corp (KEPCO), Korea Southern Power Co Ltd, Korea National Oil Corp, POSCO Holdings Inc and Samsung C&T Corp signed the agreement, Yonhap reported.

KEPCO told Reuters it will make an announcement later on Thursday. Korea National Oil Corp did not have an immediate comment. POSCO declined to comment. Korea Southern Power and Samsung C&T could not be reached for comment.

The agreement is one of over 20 that South Korean companies have signed with Saudi Arabian counterparts involving projects in fields as varied as railways and energy cooperation, South Korea’s industry ministry said in a statement on Thursday.

They include Hyundai Rotem Co’s memorandum of understanding with Saudi Arabia to cooperate on a railway project for the Middle Eastern country’s $500 billion NEOM economic zone, the ministry said.

South Korean President Yoon Suk-yeol is scheduled to hold talks with Crown Prince Mohammed on Thursday.