President Yoon Suk Yeol (third from left) talks with Hussain A. Al-Qahtani (fourth from left), chief of S-Oil Corp, a South Korea-based refiner owned by Saudi Arabia's state oil giant Aramco, during a groundbreaking ceremony at Onsan industrial park in Ulsan on Thursday. (Yonhap)

President Yoon Suk Yeol said Thursday the government will provide more incentives and ease regulatory hurdles for foreign-invested companies, as he attended the groundbreaking ceremony for the $7 billion Shaheen petrochemical project in Ulsan.

Calling the Shaheen project a symbol of "special friendship and trust" shared between South Korea and Saudi Arabia, he also said the project’s success would result in job creation, stimulate the regional economy and further solidify the cooperative relationship between the two countries.

The Shaheen project involves the construction of a large-scale petrochemical production facility within the S-Oil Onsan industrial complex located in Ulsan. The project was finalized during the visit of Saudi Arabia's Crown Prince and Prime Minister Mohammed bin Salman to Korea in November to commemorate the 60th anniversary of bilateral ties. During the visit, a memorandum of understanding worth $29 billion was signed.

“Today, the Shaheen project, a representative achievement of Korea-Saudi Arabia economic diplomacy, took its first step,” Yoon said in a congratulatory speech at the ceremony.

The Shaheen project, when completed in 2026, will be the first in the world to apply the latest technology that can increase the production yield of naphtha extracted from crude oil by more than three times.

“After three years, this will produce high valued-added petrochemical products, supply raw materials needed for the domestic industry and export them to all over the world,” Yoon said.

Noting that foreign direct investment in Korean companies last year exceeded $30 billion for the first time ever, Yoon vowed to do away with regulations that do not meet global standards to create a more favorable environment for foreign-invested companies to do business in Korea.

To ensure compliance with global standards and establish Korea as the foremost global innovation hub, the government will strengthen communication channels with foreign-invested companies to improve their business conditions and extend support in overcoming any challenges they may encounter, he said. Incentives will be provided to firms that aid in stabilizing high-tech industries and supply chains.

Around 300 individuals, including Industry Minister Lee Chang-yang, the CEO of Aramco, Amin Nasser, the Ambassador of Saudi Arabia to Korea Sami M. Alsadhan, as well as S-Oil employees, partner companies and local residents, attended the groundbreaking ceremony.

Before the ceremony, Yoon held a meeting with the Aramco CEO, during which he stated that the Shaheen project is a testament to the "seamless partnership" between the two nations in their joint pursuit of tangible achievements.

President Yoon Suk Yeol shovels at the groundbreaking ceremony for the S-Oil Shaheen project held at the Onsan industrial complex located in Ulsan on Thursday. (Yonhap)

Yoon pledged that the Korean government would cooperate fully in ensuring the success of the project, extend incentives for foreign investment, and provide meticulous support for the operation of various business permits.

The government plans to amend the enforcement decree of the Foreign Investment Promotion Act by the end of this year to strengthen incentives for investment in high-tech, stable supply chains, the presidential office said in a written statement.