The successful bid for the construction of the Barakah nuclear power plant in 2009 opened a new horizon for the partnership between Korea and the UAE. As Korea oversaw the construction of nuclear power plants, along with the supply of desalination facilities for potable water, the relationship between the two countries has developed beyond a simple metric of commercial interests into a strategic partnership. In line with the establishment of strategic partnership, the economic cooperation has further expanded and deepened.
The natural resources and energy sector has long been a key area of economic cooperation between Korea and the UAE. First of all, Korea steadily increased its imports of crude oil from the UAE, which has the sixth-largest crude oil reserve in the world, from 4.2 million barrels in 1981 to 160 million barrels in 2006. In 2019, Korea imported approximately 90 million barrels of crude oil from the UAE. Although Korea has diversified its sources of oil imports from countries in the Middle East to others around the world, approximately 10 per cent of Korea’s crude oil imports still come from the UAE, which consistently ranks it as one of Korea’s top 5 crude oil providers.
Korea has not only been involved in the trade of oil with the UAE but has also established long-term strategic cooperative relations, under which the two countries jointly participate in the development of petroleum resources. When the UAE allowed Korea’s participation in the Abu Dhabi onshore oil field development in 2012, it opened the door for Korea to participate in the upstream sector of the petroleum industry, which includes oil exploration, development, and production. In 2013, a consortium consisting of Korea National Oil Corporation (KNOC) and GS Energy Company entered into a joint venture with Abu Dhabi National Oil Company (ADNOC) to establish Al Dhafra Petroleum Company, subsequently launching an oil exploration project in the south-east Abu Dhabi region.
Since it began production in June 2019, Al Dhafra Petroleum successfully produces approximately 40,000 barrels of crude oil per day. The proven oil reserves and production volume are expected to increase as the company continues to explore additional oil fields in the region.
In addition, in 2015, KNOC and GS Energy acquired 3 per cent of the shares of ADNOC Onshore, which manages large onshore oil fields in Abu Dhabi, and have accumulated experience and skills while standing shoulder-to-shoulder with major oil companies. Based on these developments, it is expected that cooperation between Korea and the UAE will expand to the petrochemical industry, which has been the focus of the UAE’s development policies.
In 2008, the UAE decided to develop peaceful nuclear power in order to diversify its energy sources and increase its proportion of clean energy in its energy mix, releasing the white paper “Policy of the UAE on the Evaluation and Potential Development of Peaceful Nuclear Energy.” On December 27, 2009, after a fierce bidding race that lasted almost a full year with competing companies from France, Japan, and the US, a Korean consortium led by the Korea Electric Power Corporation (KEPCO) won the bid to construct the first a nuclear power plants in the UAE. As a result, Korea has become the sixth country in the world to export nuclear power plants.
The Barakah nuclear power plant project was a mega-infrastructure project worth roughly $18.6 billion that aimed to construct four 1,400 MW nuclear reactors (APR1400) developed by the Korean nuclear industry.
The Barakah was the first nuclear power plant to be built in the Arab world, and it represents an important milestone in the Korea–UAE relationship. During the construction stage, a maximum of 20,000 employees, including about 6,000 Korean staff, were working on-site, and approximately 1,000 Korean experts are working together with UAE staff during its operation. After receiving an operating license from the Federal Authority for Nuclear Regulations in February 2020, Unit 1 of the Barakah nuclear power plant was started up on July 30, 2020 and has been conducting test operations.
Unit 1 is expected to move toward full-power commercial in early 2021. Construction of Units 2, 3, and 4 is scheduled to be completed at one-year intervals thereafter. The four units of the Barakah nuclear power plant are expected to generate up to 25% of the UAE’s electricity demand when they begin commercial operations.
KEPCO also acts as an investor, holding 18 per cent of the shares of Nawah Energy Company, which owns and operates the Barakah nuclear power plants. In addition, Korean nuclear power companies, such as Korea Hydro & Nuclear Power (KHNP), KEPCO Engineering and Construction (KEPCO E&C), KEPCO Plant Service & Engineering (KEPCO KPS), and KEPCO Nuclear Fuel (KEPCO NF) will contribute to the safe and efficient operation of the UAE’s nuclear power plants by cooperating with their counterparts in operations, maintenance, nuclear fuel, engineering, decommissioning, and waste management over the 60-year lifespan.
Based on the results of the Barakah project, Korea and the UAE have agreed to find ways to jointly participate in nuclear power projects in third countries. It is expected that the two countries will be able to achieve good results in the Middle East and Europe in the near future.