Page 9 - DMEA Week 11 2023

DMEA FINANCE & INVESTMENT DMEA

Building commences on Shaheen project

SAUDI ARABIA A ceremony was held last week in Ulsan, South energy and petrochemicals company” along with
Korea, to mark the start of work on the $7bn Sha- progressing its broader carbon neutrality goal.
heen integrated petrochemical plant located in In 2018, S-Oil invested KRW4.8 trillion
Onsan Industrial Complex. ($3.7bn) on an expansion project to produce
South Korean major S-Oil Corp. plans to start propylene oxide, propylene and polypropyl-
commercial operation of the plant in 2026, and ene by reprocessing atmospheric residues from
noted that the facility will produce around 3.2mn crude refining.
tonnes per year (tpy) of petrochemical products
including ethylene, propylene benzene and buta- Impact
diene from feedstocks naphtha and off-gas. The new petrochemicals unit is key to the steady
The plant, Shaheen – the Arabic word for fal- strengthening of relations between Saudi Arabia
con – is being funded by Saudi Aramco Overseas and South Korea.
(a subsidiary of Saudi Aramco), which holds a During the ceremony, President Yoon hailed
63.4% stake in S-Oil. The project is Saudi Ara- its potential: “The Shaheen project will help
bia’s largest investment in South Korea to date, boost job creation and the local economy, while
and was finalised during South Korean Presi- further strengthening co-operation between
dent Yoon Suk-yeol’s meeting with Saudi Crown South Korea and Saudi Arabia.”
Prince Mohammed bin Salman (MbS) in Seoul Seoul has recently stepped up co-operation
last November. with Middle Eastern crude producers to improve
The plant will also contain a thermal energy security as the country’s oil refiners repo-
crude-to-chemical (TC2C) facility, which will sition away from sanctioned Russian oil. Korean
convert crude into petrochemical feedstocks National Oil Co. (KNOC) data showed a 21%
such as LPG and naphtha, as well as various other increase in Middle Eastern fuel imports from
facilities such as storage tanks. 2021 and a sharp decline of 61% in flows from
“The giant petrochemical plant will help Russia. Key South Korean government min-
S-Oil diversify its business portfolio from crude istries such as the Ministry of Trade, Industry
to chemicals for innovative growth, and will raise and Energy, and the Ministry of Economy and
S-Oil’s petrochemical portion to 25% by 2030 Finance also visited Riyadh in February, contin-
from the current level of 12%, playing a pivotal uing the free trade negotiations with represent-
role in diversifying its fuel-weighted business.” atives from GCC member nations and marking
S-Oil said in a statement. The project also aims to the seventh round of discussions between the
solidify S-Oil’s move towards becoming a “clean two parties.™

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