Saudi Aramco, through its petroleum and refinery company S-OIL, is set to develop a large-scale refinery-integrated petrochemical steam cracker in South Korea.

The Shaheen project, which converts crude oil into petrochemical feedstock, will entail an investment of $7bn, the company’s biggest-ever investment.

It follows the company’s earlier $4bn investment into the first phase of the petrochemical expansion that was completed in 2018.

The new plant will be constructed at S-Oil’s existing site in Ulsan, and includes a facility to produce high-value polymers.

With a capacity to produce up to 3.2 million tons of petrochemicals annually, the project is expected to begin in 2023 and be completed by 2026.

It represents the first commercial use of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology that enhances chemical yield and reduces costs.

Aramco president and CEO Amin H Nasser said: “The global petrochemical landscape is rapidly evolving with demand growth anticipated to accelerate, driven in part by rising consumption from Asia’s emerging economies.

“That is why S-Oil’s Shaheen is well positioned to meet the rising demand for the materials that will be required across the region’s key industries.

“By further integrating refining and chemical processes through the first commercialisation of Aramco’s thermal crude to chemicals technology, we aim to create a more efficient, competitive and sustainable platform for growth, while paving the way for further downstream expansion.”

The steam cracker will process by-products from crude processing, including naphtha and off-gas, to produce ethylene, a building block petrochemical used in several everyday items.

In addition, the plant will produce propylene, butadiene, and other basic chemicals.

The new steam cracker is expected to use mixed feedstocks, outperforming naphtha-based crackers in terms of overall efficiency and performance, said the company.

Upon completion, the project would almost double S-OIL’s yield to 25%, supporting Aramco’s strategy to expand its liquids to chemicals capacity to up to four million barrels per day.

Aramco is the majority shareholder of S-OIL, holding more than 63% shares of the company through its subsidiary Aramco Overseas Company.

Aramco downstream senior vice president Mohammed Y Al Qahtani said: “Shaheen aspires to be a game changer not only for S-OIL in South Korea, but also for our global chemicals business, allowing us to process a greater range of feedstocks in a more efficient and less energy-intensive way.

“The project represents the first large-scale deployment of Aramco’s thermal crude to chemicals technology and shows how, through better design, we can contribute to the transition to more efficient and more sustainable production processes.”