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Aramco Asia Korea, a fully owned subsidiary of Aramco, a leading global integrated energy and chemicals company, took part in the signing ceremony for 5 agreements with leading Korean companies, which aim to provide Aramco an additional crude oil supply point for its Asian customers and to promote Aramco’s hydrogen and ammonia strategy to secure offtake from Korean partners.
The signings took place at the Saudi-Korean Investment Forum in Riyadh, an event hosted by the Ministry of Investment of Saudi Arabia which was also attended by the President of the Republic of Korea, Aramco President & CEO Amin H. Nasser and senior corporate executives from Aramco and Korean companies.
Khalid Radi, Representative Director (A) of Aramco Asia Korea, remarked: “Since our founding in 2012, Aramco Asia Korea has served as a strong base to support long-standing commercial and industrial ties between Aramco and Korean companies. We take pride in our role to support Aramco continuously generating a long list of fruitful and mutually beneficial partnerships with Korean companies.”
Expanding Aramco’s oil supply point for Asia customers
Aramco Asia Korea facilitated Aramco’s signing of an international joint storage agreement with Korea National Oil Corporation (KNOC) to store 5.3 million barrels of Saudi Arabian crude oil at KNOC’s Ulsan oil storage. The crude oil storage agreement provides Aramco an additional oil supply point for its Asian customers. As of 2022, Saudi Arabian crude oil accounted for 33% of crude oil imported to Korea, and Saudi Arabia is Korea's number one crude oil supplier.
Promoting collaboration in developing and supplying hydrogen and ammonia
A Letter of Intent (LOI) with Korea Electric Power Corporation (KEPCO), POSCO Holdings and Lotte Chemical was signed with Aramco for Korean companies to import up to 3 million tons of low-carbon ammonia annually into Korea. The low-carbon ammonia from Saudi Arabia will be utilized by the Korean companies in various sectors in Korea such as ammonia co-firing in coal fired power plants, hydrogen-based ironmaking, and petrochemicals.
A LOI was also signed with S-OIL to procure low-carbon ammonia. S-OIL intends to convert the low-carbon ammonia into hydrogen and use it for its own efforts to reduce greenhouse gas emissions and related business development.
In addition, a LOI was signed between Aramco and HD Hyundai Oilbank for the Korean refiner to receive low-carbon ammonia from Aramco and to supply it as fuel for coal-fired power plants in Korea. HD Hyundai Oilbank also plans to apply the ammonia to power generation system, by breaking down low-carbon ammonia to produce hydrogen and mixing it with LNG for a new LNG power plant (HD Hyundai E&F), which is scheduled to start operations in 2026.
A Realized Localization
Aramco Asia Korea successfully materialized the signing of a joint venture agreement between BMT, a fitting and valve manufacturer in Korea, and ISG, an affiliate of Al-Abdulkarim Holdings. Under the agreement, the joint venture is scheduled to start operation from the second half of 2024 with an estimated investment of USD 26.8 million by the first half of 2026. BMT is also considering additional investments, and according to the current plan, the total investment amount is expected to reach USD 74 million.