The agreement coincides with Saudi Arabian Crown Prince Mohammed bin Salman's visit to South Korea.
The plant project, spanning 396,694 square metres in Yanbu, Saudi Arabia to be built in 2025-2029 and operated for 20 years, is expected to produce 1.2 million tonnes of green hydrogen and ammonia annually and worth about $6.5 billion dollars, Yonhap news agency reported, citing industry sources.
One of the three sources confirmed the estimated amount. The sources declined to be identified as they were not authorised to speak to media.
Korea Electric Power Corp (KEPCO), Korea Southern Power, Korea National Oil Corporation, POSCO Holdings and Samsung C&T are among the firms signing the initial agreement, Yonhap said.
KEPCO said it will make an announcement later on Thursday. Korea National Oil Corporation did not have an immediate comment. POSCO Holdings declined comment. Korea Southern Power and Samsung C&T could not be immediately reached.
(Reporting by Joyce Lee; Editing by Christopher Cushing)