Argus Media Limited

11/17/2022 | News release | Distributed by Public on 11/17/2022 02:12

South Korea’s S-Oil plans $7bn Ulsan cracker project

South Korean refiner S-Oil said today it plans to build a new mixed-gas feed cracker and downstream polymer units at its Ulsan refinery site, with completion targeted for 2026.

S-Oil, which is majority owned by Saudi Arabia's state-controlled Saudi Aramco, will spend 9.26 trillion won ($7bn) on the project, making it the Saudi firm's biggest-ever investment in South Korea.

The new mixed-feed cracker, known as the Shaheen project, will have nameplate capacity to produce 1.8mn t/yr of ethylene, 770,000 t/yr of propylene, 200,000 t/yr of butadiene and 280,000 t/yr of benzene. Downstream polymer units include 880,000 t/yr of linear low-density polyethylene (PE) and 440,000 t/yr of high-density PE capacity. Construction is due to start by 2023 with completion scheduled by 2026.

This will be the first mixed-gas cracker owned by S-Oil, which is seeking to reduce its heavy reliance on refining and diversify into the petrochemicals sector. S-Oil's chemical yield by volume could almost double to 25pc when the project is completed, according to Aramco.

The project is one of the world's largest refinery-integrated steam crackers and will be the first commercialisation of Aramco and US firm Lummus Technology's TC2C thermal crude to chemicals technology, which increases chemical yields and cuts costs, Aramco said.

S-Oil's existing refinery at Ulsan can produce up to 200,000 t/yr of ethylene and 900,000 t/yr of propylene from its fluid catalytic cracker. Propylene production from S-Oil feeds into a 405,000 t/yr polypropylene (PP) unit and 300,000 t/yr propylene oxide plant. The company currently does not operate any ethylene downstream units.

The new cracker and PE plants under the Shaheen project, together with S-Oil's existing refinery, will take the company's output to over 780,000 t/yr (65,000 t/month) of ethylene and 1.02mn t/yr (85,000 t/month) of propylene at full capacity.

S-Oil initially announced plans for a smaller cracker project at Ulsan in 2018, with commissioning targeted for 2023. The project ran into delays because of Covid-19 lockdowns in 2020.

Shaheen will be the fourth new cracker project to come on line in South Korea in recent years, after fellow petrochemicals producers LG Chem, GS Caltex and [Hyundai Chemical]( https://direct.argusmedia.com/newsandanalysis/article/2276431) commissioned crackers in 2021.

The project is in line with Aramco's strategy to expand its global liquids-to-chemicals capacity to up to 4mn b/d by 2030.

By Toong Shien Lee and Nader Itayim