Page 11 - MEOG Week 47 2022

MEOG PROJECTS & COMPANIES MEOG

Aramco to back South Korean project

SAUDI ARABIA SAUDI Aramco has confirmed it will invest When complete the project will produce pet-
around $7bn (KRW9.3 trillion) in a new pet- rochemicals from crude supplied by S-Oil Cor-
rochemical facility on the Sea of Japan coast of poration’s own refinery, also located in Ulsan.
South Korea. S-Oil is currently a majority Saudi Aram-
Speaking late last week in the wake of the co-owned firm, with the Saudi firm holding over
announcement, Saudi Aramco chief executive 60% of the Seoul-based company.
Amin Nasser said the demand for increased pet- “The $7bn Shaheen project aims to con-
rochemical production is “anticipated to accel- vert oil into petrochemical feedstock and
erate, driven in part by rising consumption from would represent the first commercialisation of
Asia’s emerging economies.” Aramco and Lummus Technology’s thermal
When first agreed, the memorandum of crude-to-chemical technology, which increases
understanding (MoU) signed for the project, in chemical yield and reduces operating costs,” a
pre-Covid 2019, was valued at $6bn. statement released by Saudi Aramco said.
Three years of Covid-induced delays and The petrochemical facility will eventually be
South Korea, being one of the worst affected producing in the region of 3.2mn tonnes per year
places in Asia in the early days of the pandemic, (tpy) of petrochemicals according to sources,
has seen this figure increase significantly. with ground set to be broken in Ulsan sometime
Nasser’s comments last week came on the next year. Reports released by Aramco also indi-
same day that Saudi Crown Prince Mohammed cate the site will be up and running sometime
bin Salman (MbS) was on an official state visit to late in 2026.
South Korea, and is seen by some in the country When operating at full capacity Project Sha-
as Riyadh attempting to again court one of East heen’s barrel per day capacity, in turns of usage,
Asia’s largest economies as increased efforts are will be in the region of 46,000 bpd, which in
being made across the region to move away from turn is expected to produce 1.8mn tonnes in any
carbon-based energy sources. given year. In terms of benefiting S-Oil Corp’s
Similar comments were heard from Singa- long-term future, and with demand for gasoline
pore-based energy consultancy firm FGE with a on the decline, “the Shaheen project will increase
statement by Natural Gas Liquids (NGL) global chemical yields while reducing operating costs,
head at the firm, Armaan Ashraf, saying of a thus making it more competitive especially in a
recent downturn in demand in Asia on the back low-margin environment,” according to Chua
of widespread COVID lockdowns across China: Sok Peng of Refinitiv.
“Eventually demand continues to grow ... you Ethylene, propylene and butadiene are all
will at some point need a wave of petchems to chemicals that need to be produced in large
meet that demand.” amounts, according to S-Oil, along with over
A provisional name for the project in South 1.3mn tpy of both high and low density polyeth-
Korea, Shaheen, has already been chosen, and ylene resins, one of the most widely used plastics
when complete will prove to be Saudi Aram- in the world.
co’s largest investment to date in the Korean As senior vice president of downstream at
peninsula. Aramco, Mohammed Y. Al Qahtani, said: “Sha-
The site chosen for the project is the port city heen aspires to be a game-changer, not only for
of Ulsan on South Korea’s south-east coast, close S-Oil, in South Korea, but also for (Aramco).”™
to the nation’s largest port city, Busan.

Week 47 23•November•2022 www. NEWSBASE .com P11