Aramco affiliate to build $7bn steam crackers in South Korea

Reuters/Hamad I Mohammed

Saudi Aramco will develop one of the world’s largest refinery-integrated petrochemical steam crackers through its S-OIL affiliate in South Korea, the company said in a statement.

The $7 billion Shaheen project aims to convert crude oil into petrochemical feedstock, representing the first commercialisation of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology that increases chemical yield and reduces operating costs. 

It follows an earlier $4 billion investment into the first phase of the petrochemical expansion completed in 2018.

Located at S-Oil’s existing site in Ulsan, 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 steam cracker is likely to process by-products from crude processing, including naphtha and off-gas, to produce ethylene, a building block petrochemical used to make thousands of everyday items, the statement said. 

Aramco president and CEO Amin H. Nasser said that the global petrochemical landscape is rapidly evolving, with demand growth anticipated to accelerate, driven partly by rising consumption from Asia’s emerging economies. 

“S-Oil’s Shaheen is well positioned to meet the rising demand for the materials that will be required across the region’s key industries.”

Aramco senior vice president of downstream Mohammed Al Qahtani said the project represents the first large-scale deployment of Aramco’s thermal crude to chemicals technology, which can contribute to the transition to more efficient and more sustainable production processes.

Upon project completion, S-OIL chemical yield based on volume could almost double to 25 percent, complementing Aramco’s strategy to expand its liquids to chemicals capacity to up to four million barrels per day.

The Saudi oil giant is the majority shareholder of S-OIL, holding more than 63 percent of the company’s shares through its Aramco Overseas Company BV subsidiary.