Page 6 - AsianOil Week 47 2022

AsianOil EAST ASIA AsianOil

Saudi giant to back South Korean project

INVESTMENT SAUDI Aramco has confirmed it will invest petrochemicals from crude supplied by S-Oil
around $7bn (KRW9.3 trillion) in a new pet- Corporation’s own refinery, also located in
The Saudi giant is rochemical facility on the Sea of Japan coast of Ulsan.
looking to put in $7bn. 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.
same day that Saudi Crown Prince Mohammed Reports released by Aramco also indicate
bin Salman (MbS) was on an official state visit to the site will be up and running sometime late in
South Korea, and is seen by some in the country 2026.
as Riyadh attempting to again court one of East When operating at full capacity Project Sha-
Asia’s largest economies as increased efforts are heen’s barrel per day capacity, in turns of usage,
being made across the region to move away from will be in the region of 46,000 bpd, which in
carbon-based energy sources. turn is expected to produce 1.8mn tonnes in any
Similar comments were heard from Singa- given year.
pore-based energy consultancy firm FGE with a In terms of benefiting S-Oil Corp’s long-
statement by Natural Gas Liquids (NGL) global term future, and with demand for gasoline on
head at the firm, Armaan Ashraf, saying of a the decline, “the Shaheen project will increase
recent downturn in demand in Asia on the back chemical yields while reducing operating costs,
of widespread COVID lockdowns across China: thus making it more competitive especially in a
"Eventually demand continues to grow ... you low-margin environment," according to Chua
will at some point need a wave of petchems to Sok Peng of Refinitiv.
meet that demand." Ethylene, propylene and butadiene are all
A provisional name for the project in South chemicals that need to be produced in large
Korea, Shaheen, has already been chosen, and amounts, according to S-Oil, along with over
when complete will prove to be Saudi Aram- 1.3mn tpy of both high and low density polyeth-
co’s largest investment to date in the Korean ylene resins, one of the most widely used plastics
peninsula. in the world.
The site chosen for the project is the port city As senior vice president of downstream at
of Ulsan on South Korea’s south-east coast, close Aramco, Mohammed Y. Al Qahtani, said: “Sha-
to the nation’s largest port city, Busan. heen aspires to be a game-changer, not only for
When complete the project will produce S-Oil, in South Korea, but also for (Aramco).” ™

P6 www. NEWSBASE .com Week 47 28•November•2022