S-OIL Implements Mega Project to Invest $7 Billion in Ulsan
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S-OIL Implements Mega Project to Invest $7 Billion in Ulsan
‘Landmark investment represents exciting new chapter in Korea’s petrochemical industry’

26(Sat), Nov, 2022

S-OIL, Hyundai E&C and Hyundai Engineering struck a contract on a project, called “Shaheen” at the international conference room of the Korea Chamber of Commerce and Industry in Seoul on Nov. 17. Seen (from left) at a signing ceremony are Lotte E&C President Ha Suk-joo, Hyundai E&C President Yoon Young-joon, Saudi Minister of Economy and Planning Faisal bin Fadhil Alibrahim, S-OIL CEO Hussain A. Al-Qahtani, Minister of Trade, Industry and Energy Lee Chang-yang, Khalid al-Falih, minister of the Saudi Ministry of Investment (MISA), and Hyundai Engineering President Hong Hyun-sung. (Photo: Hyundai E&C) 

S-OIL announced a plan to invest a $7 billion (9,258 billion won) project, called “Shaheen” in connection with Saudi Crown Prince bin Salman’s official visit here. Aramco, a Saudi state-own company, has the biggest stake in S-OIL. 

In 2019, Crown Prince bin Salman announced the project, and he finalized the investment in the project during the current visit. 

An S-OIL official said, “The Shaheen project will raise S-OIL’s portion of petrochemical products from current 12 percent to 25 percent.” 

S-OIL plans to develop a $7 billion petrochemical project in Ulsan, featuring one of the world’s largest refinery-integrated petrochemical steam crackers, which will support the long term and stable delivery of building block petrochemicals to Korea and beyond.

S-OIL announced the final investment decision (FID) on Nov. 17 for the ‘Shaheen Project’ (Arabic word for Peregrine Falcon), which aims to support the energy transition in the country.

The Shaheen project is the largest ever investment made in Korea by Aramco, which holds 63.4 percent of the company’s shares via its subsidiary Aramco Overseas Company B.V (AOC). 

The next-generation process facilities are expected to produce up to 3.2 million tons of petrochemicals annually. It follows the $4 billion phase one petrochemical expansion project completed in 2018. 

The announcement coincided with a summit meeting between South Korean President Yoon Suk-yeol and HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister of the Kingdom of Saudi Arabia. 

The steam cracker will deploy Aramco’s cutting edge TC2C thermal crude-to-chemicals technology, capable of producing high value petrochemicals as feedstock for plastics and other synthetic materials. 
The project is expected to start in 2023 with completion targeted for 2026. 

S-OIL CEO Hussain Al-Qahtani said, "We have taken the first step on a great journey of development. With the full support of the governments of our two countries, our successful track record in delivering major projects and the outstanding professionalism of our team, we are confident that Shaheen will not only diversify our portfolio towards chemicals but also deliver industry-leading energy efficiency.”

Shaheen will mobilize as many as 17,000 workers per day during construction and generate over 3 trillion won in economic value to the Ulsan local construction industry. 

The project will also support the stable supply of petrochemical feedstock to South Korea. 

The steam cracker will treat by-products from crude processing including naphtha, off-gas and other feedstocks to produce ethylene, propylene, butadiene and benzene, among other basic chemicals. 

The plant will also produce polyethylene used as feedstock for making plastics and other synthetic materials. 

The TC2C process utilizes low value heavy oil, which is processed in the existing refinery into steam cracker feedstock. 

This is the first time Aramco’s TC2C technology has been commercialized, with the hope of giving the new project a competitive edge when compared to older generation crackers. 

Shaheen will also support S-OIL’s ambition to operate more efficiently by recovering and recycling waste heat from the steam cracker and improved overall energy efficiency. 

Upon project completion, S-OIL’s chemical yield based on volume will more than double from the current level (12 percent) to 25 percent.

S-OIL held the EPC contract awarding ceremony with Hyundai Engineering & Construction, Hyundai Engineering and Lotte Engineering & Construction at the Korea Chamber of Commerce and Industries on Nov. 17th bringing the Project EPC to full track. 

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