Shaheen petrochemical project : Aramco’s affiliate S-OIL to construct $7bn petrochemical cracker in South Korea

Saudi Aramco, through its affiliate S-OIL, will construct a new petrochemical cracker in South Korea, the Shaheen petrochemical project, in an effort to maximize its crude to chemicals value chain.

The $7 billion-worth Shaheen project in South Korea is expected to change crude oil into petrochemical feedstock and almost double S-OIL’s chemical yield to 25% post-completion.

S-OIL has awarded the engineering, procurement, and construction (EPC) contract for the South Korean petrochemical project to Hyundai Engineering & Construction, Lotte Engineering & Construction, and Hyundai Engineering.

The proposed refinery-integrated petrochemical steam cracker will manufacture up to 3.2 million tons of petrochemicals per year and include a high-value polymers facility.

To be located at S-Oil’s existing refinery site in Ulsan, the Shaheen petrochemical project is likely to process by-products resulting from crude processing. These include naphtha and off-gas for the production of ethylene.

Besides, the Shaheen petrochemical cracker will manufacture basic chemicals such as butadiene and propylene.

Aramco’s affiliate S-OIL to construct $7bn Shaheen petrochemical project in South Korea. Photo courtesy of S-OIL CORPORATION.

Hussain Al-Qahtani — S-OIL CEO said: “We have taken the first step on a great journey of development. With the full support of the governments of our two countries, our successful track record in delivering major projects and the outstanding professionalism of our team, we are confident that Shaheen will not only diversify our portfolio towards chemicals but also deliver industry-leading energy efficiency.”

The new steam cracker will leverage the thermal crude to chemicals (TC2C) technology of Aramco built in partnership with Lummus Technology, which will mark the first commercial deployment of the technology.

TC2C technology is expected to scale chemical yield and minimize operating costs.

Amin H Nasser — Aramco president and CEO said: “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.

“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 new Shaheen petrochemical cracker is expected to be fed with mixed feedstocks to improve total productivity and performance, compared to naphtha-based crackers.

Work on the Shaheen petrochemical is anticipated to begin in 2023 and be finished by 2026.

Aramco, through its Aramco Overseas Company B.V. subsidiary, holds over 63% of S-OIL shares.