A steam cracker built by Aramco, allows the company to deploy its largest ever investment in South Korea.
S-OIL, a subsidiary of Aramco, invests in petrochemicals
A steam cracker for the Shaheen project is being built through Aramco’s S-OIL subsidiary. This is a $7 billion investment to convert crude oil into petrochemical feedstock. Its largest investment ever in South Korea.
Aramco plans to develop one of the world’s largest refinery-integrated petrochemical steam crackers. The company’s strategy is to maximize the value chain from crude to chemical. The deal would represent the first commercialization of Aramco and Lummus Technology’s TC2C thermal crude oil technology into chemicals.
This increases the chemical yield and reduces operating costs. In 2018, the first phase of operation of the petrochemical expansion, with an investment of $4 billion, is completed. Located in Ulsan, the new plant is expected to have the capacity to produce up to 3.2 million tons of petrochemicals per year.
It should also include a polymer production facility. The steam cracker project is expected to start in 2023 and be completed in 2026. The steam cracker is expected to process the by-products of crude processing, including naphtha and off-gases. In order to produce ethylene used in the manufacture of thousands of everyday items.
The challenges of petrochemicals
Aramco President and CEO Amin H. Nasser explains the challenge of building the steam cracker in South Korea:
“The global petrochemical landscape is changing rapidly and demand growth is expected to accelerate, driven in part by rising consumption in emerging economies in Asia. That’s why S-Oil’s Shaheen is well positioned to meet the growing demand for materials that will be needed in key industries in the region. By further integrating refining and chemical processes through the first commercialization of Aramco’s thermal crude oil technology into chemicals, we aim to create a more efficient, competitive and sustainable growth platform, while paving the way for downstream expansion.”
The steam cracker should also use mixed feedstocks. Thus, it would outperform naphtha-based steam crackers in terms of overall performance.
The chemical yield could almost double to 25%. It therefore demonstrates the impact of this advanced technology. Aramco’s strategy is to expand its chemical liquids capacity to 4 million barrels per day.
Aramco is the majority shareholder of S-OIL and holds over 63% of the shares through its subsidiary Aramco Overseas Company BV. Aramco aims to create a more efficient, competitive and sustainable growth platform. It also opens the way for downstream expansion.