Mohammed Y. Al Qahtani, President of Downstream at Aramco, the parent company of S-OIL, made an inspection tour of the Shaheen Project at the Onsan National Industrial Complex in Ulsan on May 12.
The Shaheen Project is a petrochemical expansion project S-OIL is implementing over an area covering about 880,000 sq. meters, an equivalent to the combined size of some 120 soccer stadiums, at a cost of 9,258 billion won.
The project, the largest-ever in Korean Petrochemical history, was launched in March 2023, and is scheduled to be dedicated in the second half of next year.
The current progress of the project stands at 69.1 percent.
In April, S-OIL announced a plan to achieve the successful completion of the Shaheen Project and raise its corporate value through a focus on strategic investments and shareholder return, attracting the limelight from the market.
The Shaheen Project is a core part of S-OIL’s strategies to raise its corporate values.
If the project, to be dedicated in the second half of 2026, is in full swing by 2027, S-OIL is predicted to achieve full-fledged revenue growth in the mid- and long-term perspective.
Saudi Aramco became the biggest shareholder of S-OIL in 2015 when the former acquired a 63.4 percent stake. S-OIL produces and sells refining oil, petrochemical and lubricant oil products by processing crude oil and other raw materials.
In 2023, S-OIL embarked on three goals through the implementation of the Shaheen Project: downstream transformation, digital transformation and new business and decarbonization strategies.
As for downstream transformation, the refinery company plans to expand value-added products and conduct programs to improve revenues.
In order to achieve digital transformation, S-OIL plans to introduce digital plants and smart work, while ramping up the gathering of data-based market information.
The company plans to implement new businesses, such as the introduction of biomaterials and waste plastic pyrolysis oil technology, as well as implementing programs to reduce greenhouse gas emissions.
Korean refinery companies have been grappling with poor business performances due to worsening Korean and overseas market conditions.
However, S-OIL has continued to make large-scale strategic investments while undergoing declining market periods, such as the Asian financial crisis in the late 1990s, the global financial crisis in the early2000s and a plunge in crude oil prices.
In particular, S-OIL has maintained stable dividend policy trends to maximize shareholders’ value.
The company aims to carry out the Shaheen Project successfully and achieve the average dividend payout ratio of 39 percent.
The refinery company’s figure is higher than Kospi’s average dividend payout ratio of 26.8 percent.
S-OIL to Diversify Portfolio from “Crude to Chemicals” for Innovative Growth
Shaheen reflects S-OIL’s ambitious plan to solidify its position as a clean energy and petrochemicals company that supports broader carbon neutrality ambitions.
The project is located at the Onsan Industrial Complex of Ulsan City.
Major units include the world’s largest steam cracker (production capacity: 1,800 KTA of ethylene), a TC2C facility which converts crude directly into petrochemical feedstock (LPG, Naphtha), a polymer facility that produces high value petrochemical feedstock for plastics and other synthetic resins, and other facilities including storage tanks.
After completion of the project, S-OIL’s petrochemical production will more than double to 25 percent from the current 12 percent of total production, playing a pivotal role in diversifying its fuel-weighted business.
The project is not only benefitting the economy of Ulsan, but also the country’s wider manufacturing industry.
Cutting Edge Technologies
Shaheen will showcase cutting edge technologies that support the reduction of greenhouse gas emissions.
For example, its steam cracker will recycle waste heat for power generation in the refinery.
The use of ‘TC2C’ technology will help to reduce carbon emissions through a simplified and highly efficient conversion process.
With the deployment of this new technology, which is being commercialized for the first time, crude and other low value heavy oils will be upgraded into steam cracker feedstocks.
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