S Korea’s S-Oil begins building $7bn crude-to-chemicals Shaheen project in Ulsan

SINGAPORE (ICIS)–South Korean refiner S-Oil has started building its crude-to-chemicals project in Ulsan which is expected to provide won (W) 3tr ($2.3bn) in added value to the northeast Asian economy.

A groundbreaking ceremony was conducted on 9 March for the project called Shaheen – Arabic word for falcon – which should generate up to 17,000 jobs during peak construction, and after start-up, should support more than 400 jobs, S-Oil said in a statement.

The company is over 63%-owned by Saudi Aramco through its subsidiary Aramco Overseas Co.

The project located at the Onsan Industrial Complex of Ulsan City is slated to be completed in 2026.

It will include a 1.8m tonne/year mixed-feed cracking facility.

The project will further include a 880,000 tonne/year linear low density polyethylene (LLDPE) unit; and a 440,000 tonne/year high density polyethylene (HDPE) plant.

“Shaheen will significantly improve the stable supply of petrochemical feedstock and more than double ethylene production capacity in Ulsan. It will also supply monomer products through a pipeline to adjacent downstream olefin-processing businesses,” S-Oil said.

The site will also have a thermal crude-to-chemical (TC2C) facility which will convert crude directly into petrochemical feedstocks such as liquefied petroleum gas (LPG) and naphtha, and the cracker is expected to recycle waste heat for power generation in the refinery, the company said.

“With the deployment of this new [T2C2] technology, which is being commercialized for the first time, crude and other low value heavy oils will be upgraded into steam cracker feedstocks,” S-Oil said.

Once the project is completed, petrochemical production will more than double its share to S-Oil’s total output to 25% from 12% currently, “playing a pivotal role in diversifying its fuel-weighted business”, it said.

Including the first phase of the project completed in 2018, the total investment in Ulsan’s crude-to-chemical projects is W14tr – the largest ever for Saudi Aramco in South Korea.

Focus article by Pearl Bantillo

($1 = W1,320)