Saudi Aramco will invest US$7 billion in its South Korean affiliate S-Oil for the construction of a refinery-steam cracker plant that will convert crude oil into high-value petrochemical products.

Located at S-Oil’s existing site in Ulsan, the plant will have the capacity to produce up to 3.2 million tonnes 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 Shaheen project, Aramco’s biggest-ever investment in the East Asian country, will represent the first commercialization of Aramco and Lummus Technology’s thermal crude-to-chemicals (TC2C) technology, which increases chemical yield and reduces operating costs.

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

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.

Amin H. Nasser, Aramco president and chief executive officer, comments: “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.”

Upon completion of the project, S-Oil’s chemical yield based on volume could almost double to 25%, complementing Aramco’s strategy to expand its liquids-to-chemicals capacity to up to 4 million barrels per day.

Aramco is the majority shareholder of S-Oil, holding more than 63% of the company’s shares through its Aramco Overseas Company B.V. subsidiary.