DHAHRAN — Saudi Aramco plans a $7-billion investment at a South Korean affiliate's factory in the port city of Ulsan to turn out more high-value petrochemical products, the company said on Thursday.

The project, named Shaheen, is the Saudi company's biggest investment in the Asian nation to develop one of the world's largest refinery-integrated petrochemical steam crackers, Aramco said in a statement.

The investment through S-OIL is in line with the company’s strategy to maximize the crude to chemicals value chain.

The project aims to convert crude oil into petrochemical feedstock and would represent the first commercialization of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology, which 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 set to have a capacity to produce up to 3.2 million tons of petrochemicals annually. It includes a facility to produce high-value polymers. The project is expected to start in 2023 and be completed by 2026.

The steam cracker is expected 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 plant is also expected to produce propylene, butadiene and other basic chemicals.

Aramco President & CEO Amin H. Nasser 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.”

Aramco Senior Vice President of Downstream Mohammed Y. Al Qahtani said: “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. 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. Upon project completion, S-OIL chemical yield based on volume could almost double to 25%, 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.

Aramco owns the majority stake in S-OIL, holding more than 63% of the company’s shares through its Aramco Overseas Company B.V. subsidiary. — SG