S. Korea, Saudi Arabia seek stronger partnership for Vision 2030

President Yoon Suk-yeol and Saudi Arabian Crown Prince and Prime Minister Mohammed bin Salman take a walk after their meeting at the former's residence in Seoul, Thursday. Courtesy of South Korean presidential office

Two nations sign 26 MOUs in various fields including infrastructure, energy

By Nam Hyun-woo

President Yoon Suk-yeol and Saudi Arabian Crown Prince and Prime Minister Mohammed bin Salman agreed on the importance of bilateral economic partnership to move the kingdom's ambitious Vision 2030 initiative forward during their meeting in Seoul, Thursday.

The Saudi crown prince arrived in South Korea on Wednesday after attending the G-20 Summit in Bali, Indonesia. Before meeting Yoon, the crown prince held a flurry of meetings with South Korean government officials and business leaders to discuss ways to deepen the two countries' economic partnership, which was followed by business deals worth up to 40 trillion won ($30 billion).

During the meeting, Yoon said Saudi Arabia stands as South Korea's largest trading partner in the Middle East and is one of the key companions of Seoul's economic and energy security, while it is the right time to upgrade bilateral relations as the oil-rich country is paving its way into the future through the crown prince's Vision 2030 initiative. That vision charts the Middle Eastern country's future away from an oil-centric economy.

Prince Mohammed said South Korean companies made great contributions to the development of Saudi Arabia's infrastructure, and that he wants to enhance cooperation between the two countries, specifying the fields of energy, defense and infrastructure, according to the South Korean presidential office.

The last time the crown prince visited Seoul was in 2019 to discuss the two countries' partnership in Vision 2030. The crown prince also had a meeting with Yoon's predecessor, Moon Jae-in, when he visited Saudi Arabia in January of this year.

As part of Vision 2030, Saudi Arabia is seeking partnerships with the South Korean government and companies for Neom, a $500 billion (657 trillion won) project the crown prince initiated in 2017. The project aims to develop eco-friendly and smart cities covering a total of 26,500 square kilometers in Saudi Arabia's northwestern Tabuk Province near the Red Sea.

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Before Yoon's meeting with the crown prince, South Korea and Saudi Arabia signed 26 MOUs, whose combined value is assumed to surpass 40 trillion won.

The MOUs encompassed South Korean companies' participation in the railway infrastructure of the Neom project and the kingdom's other massive projects involving the areas of construction, petrochemicals, agriculture and energy.

President Yoon Suk-yeol, second from right, speaks during his meeting with Saudi Arabian Crown Prince and Prime Minister Mohammed bin Salman, second from left, at the former's residence in Seoul, Thursday. Courtesy of South Korean presidential office

During his meeting with the South Korean president, Prince Mohammed noted that he wants the two countries to cooperate to develop hydrogen energy, carbon capture technology and nuclear power, including small modular reactors (SMRs).

SMRs are touted as the next generation of nuclear reactors, defined by safer and simpler designs and construction method despite a lower power generation capacity.

Saudi Arabia is looking for a builder for its nuclear power plant project involving two 1.4-gigawatt reactors by 2030. With South Korea, France, China and Russia showing their intent to participate in the 12 trillion won project, the competition is now viewed as a two-way race between South Korea's Korea Electric Power Corp. and Russia's Rosatom.

Although the crown prince's reference is interpreted as a positive sign for South Korea's bid to bag nuclear power contracts from Saudi Arabia, the kingdom's relations with the U.S. is casting uncertainties.

Currently, the U.S. is saying that South Korea's flagship nuclear reactor, APR-1400, uses key technologies of Westinghouse Electric Company. Thus the reactor's export should be approved by the firm and the U.S. Department of Energy. Although this remains as a disputable matter, industry officials say Saudi Arabia's relations with the U.S. may affect Seoul's efforts to win nuclear power contracts.

A Seoul-Washington agreement on nuclear reactors also remains as a setback. Last year, South Korea and the U.S. agreed to join forces to export nuclear reactors and to demand an importing country to sign an additional protocol of its safeguard arrangements with the International Atomic Energy Agency (IAEA), which allows the agency to increase its verification capability in the importing country.

Currently, Saudi Arabia has not signed an additional protocol in its attempt to hold Iran's nuclear development attempt in check.

Saudi Arabia is South Korea's largest trading partner among Middle East nations, with trade between the two countries reaching $27.6 billion last year. Saudi Arabia is also the largest oil exporter to South Korea, accounting for 29.3 percent of crude oil that Seoul imported last year.