SEOUL -- With the blessing of Saudi Crown Prince Mohammed bin Salman, S-Oil, a petroleum and refinery company controlled by Aramco, unveiled a new investment of $7.0 billion to upgrade new facilities and build a giant steam cracker that produces ethylene from naphtha and off-gas. This marked Aramco's most prominent investment in South Korea.
S-Oil said in a regulatory filing on November 17 that the new investment was endorsed for a second-stage petrochemical expansion project called "Shaheen" to improve profitability by upgrading low-value raw materials such as naphtha, byproduct gas and residual oil into high-value chemical products. The $4.0 billion first-stage project was completed in 2018.
Aamco is strengthening S-Oil's competitiveness through portfolio diversification, with its new investment coinciding with the arrival of Salman in Seoul to broaden cooperation with South Korean companies for his Vision 2030 initiative to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation, and tourism. The powerful Saudi crown prince is the largest shareholder of Aramco, which controls a 63.4 percent stake in S-Oil.
The Shaheen project focuses on the construction of a steam cracker and an olefin downstream facility that produces polyethylene and polypropylene. The steam cracker produces ethylene, propylene, butadiene, and benzene. When completed in 2026, S-OIL will be able to increase the proportion of petrochemicals to 25 percent from 12 percent.
S-Oil will introduce Aramco's thermal crude to chemicals (TC2C) technology to produce high-value-added petrochemical products used as synthetic resin raw materials, including plastic. TC2C enables high yield and employs a proprietary direct conversion process.
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