Saudi Aramco to invest $7b in new petrochemical facility in South Korea - its biggest investment there
Saudi oil giant to build a 'refinery-integrated' petrochemical steam crackers in Ulsan
Dubai: The Saudi Aramco is committing its biggest investment outlay in South Korea, to build what would be one of the world’s largest ‘refinery-integrated petrochemical steam crackers’. This will be done through the Aramco affiliate S-OIL and the size of the investments would be $7 billion.
Located at S-Oil’s existing site in Ulsan, the new plant could have a capacity for up to 3.2 million tons of petrochemicals annually and will include a facility to produce high-value polymers. The project is expected to start in 2023 and be completed by 2026.
The project represents the first large-scale deployment of Aramco’s thermal crude-to-chemicals technology.
Aramco is the major shareholder in S-OIL, with more than 63% of the company’s shares through its Aramco Overseas Company B.V. subsidiary.
It follows an earlier $4 billion investment into the first phase of the petrochemical expansion, which was completed in 2018. “The global petrochemical landscape is rapidly evolving with demand growth anticipated to accelerate, driven in part by rising consumption from Asia’s emerging economies," said Amin H. Nasser, Aramco President and CEO. "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.
"By further integrating refining and chemical processes through the first commercialization 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.”
The steam cracker unit is expected to process by-products from crude processing, including naphtha and off-gas, to produce ethylene. This is a 'building block' petrochemical used for making everyday items. The plant is also expected to produce propylene, butadiene and other basic chemicals.
"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," said Mohammed Y. Al Qahtani, Aramco's Senior Vice-President of Downstream. "On project completion, S-OIL chemical yield based on volume could almost double to 25 per cent, complementing Aramco’s strategy to expand its liquids-to-chemicals capacity to up to 4 million barrels per day."