Aramco is making its largest-ever investment in South Korea to construct one of the biggest refinery-integrated petrochemical steam crackers, in line with the company’s plan to maximize the value chain from oil to chemicals. This investment is being made through its S-Oil affiliate.
The $7 billion Shaheen project intends to convert crude oil into petrochemical feedstock and will constitute the first commercialization of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology, which increases chemical yield and reduces operating costs. It comes after an earlier $4 billion investment in the petrochemical’s first phase expansion which was completed in 2018.
The new plant to produce up to 3.2 million tons of petrochemicals per annum
Located at S-Oil’s existing site in Ulsan, the new plant is designed to have the capacity to produce up to 3.2 million tons of petrochemicals per annum and include a facility to produce high-value polymers. The project is anticipated to commence in 2023 and be completed by 2026.
The steam cracker is anticipated to process by-products from crude processing including naphtha and off-gas, to produce ethylene – a building blocks petrochemical used to make large numbers of everyday items. The plant is also anticipated to produce propylene, butadiene, and other basic chemicals.
Aramco President & CEO, Amin H. Nasser, said that the global petrochemical setting is precipitously advancing with demand growth anticipated to accelerate, driven in part by rising consumption from Asia’s emerging financial system. Therefore S-Oil’s Shaheen is well positioned to gather the rising demand for the materials that will be essential throughout the region’s key industries. By further integrating refining and chemical processes through the first commercialization of Aramco’s thermal crude to chemicals technology, it intends to generate a more effective, competitive, and sustainable platform for growth, while paving the way for further downstream expansion.
Saudi Aramco’s Senior Vice President of Downstream, Mohammed Y. Al Qahtani, said that Shaheen aspires to be a game changer not only for S-Oil in South Korea but also for its global chemicals business, permitting them to process a greater range of feedstocks in a more effective and less energy-intensive manner. The project represents the first large-scale deployment of Aramco’s thermal crude to chemicals technology and demonstrates how, through better design, the company can contribute to the transition to more efficient and more sustainable production systems.
S-Oil chemical yield based on volume to double up to 25% upon project completion
The new steam cracker is planned to use mixed feedstocks, surpassing naphtha-based crackers in terms of overall effectiveness and implementation. Upon project completion, S-Oil chemical yield based on volume can double up to 25% which validates the effect of this leading-edge technology, achieving Aramco’s strategy to expand its liquids to chemicals capacity to up to 4 million barrels each day.
Aramco is the majority shareholder of S-OIL, securing over 63% of the company’s shares through its Aramco Overseas Company B.V. subsidiary.
About Saudi Aramco
Saudi Aramco traces its early stages to 1933 when a Concession Agreement was authorized between Saudi Arabia and the Standard Oil Company of California (SOCAL). The California Arabian Standard Oil Company (CASOC) subsidiary company was created to manage the agreement.
Formally known as Saudi Arabian Oil Company, it is predominantly state-owned and is based in Dhahran, Saudi Arabia. Saudi Aramco is the world’s leading integrated energy and chemicals company, aimed at maximizing income, accelerating the sustainable and diversified expansion of the Kingdom’s economy, and enabling a worldwide competitive and vibrant Saudi energy sector.