Saudi Aramco will invest $7 billion at South Korean affiliate’s factory in the port city of Ulsan, the company said in a statement on Thursday.
The move is part of Saudi Aramco’s efforts to turn out more high-value petrochemical products.
Titled ‘Shaheen’, the project will be the biggest ever Aramco investment in South Korea, and will contribute to a stable supply of feedstock, the statement said, adding that “the new plant is planned to have the capacity to produce up to 3.2 million tons of petrochemicals annually and include a facility to produce high-value polymers.”
The project is expected to start in 2023 and be completed by 2026.
“The global petrochemical landscape is rapidly evolving with demand growth anticipated to accelerate, driven in part by rising consumption from Asia’s emerging economies. That is why S-Oil’s Shaheen is well positioned to meet rising demand for the materials that will be required across the region’s key industries,” Aramco’s president and chief executive officer Amin H. Nasser said.
Nasser added: “By further integrating refining and chemical processes through the first commercialisation of Aramco’s thermal crude to chemicals technology, we aim to create a more efficient, competitive and sustainable platform for growth, while paving the way for further downstream expansion.”
Aramco, which is the majority shareholder of S-OIL, holds over 63 percent of the company’s shares through its Aramco Overseas Company B.V. subsidiary.
“Shaheen aspires to be a gamechanger not only for S-OIL in South Korea, but also for our global chemicals business, allowing us to process a greater range of feedstocks in a more efficient and less energy-intensive way,” Aramco’s senior vice president of downstream Mohammed Y. Al Qahtani said.
Al Qahtani added: “The project represents the first large-scale deployment of Aramco’s thermal crude to chemicals technology and shows how, through better design, we can contribute to the transition to more efficient and more sustainable production processes.”
The new steam cracker is planned to use mixed feedstocks, outperforming naphtha-based crackers in terms of overall efficiency and performance.
On completion, S-OIL chemical yield based on volume could almost double to 25 percent, which demonstrates the impact of this cutting-edge technology, complementing Aramco’s strategy to expand its liquids to chemicals capacity to up to 4 million barrels per day.
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