Saudi Aramco to inject $7 billion into petchem’s largest investment in South Korea

SEOUL, Nov 17 (Reuters) – Saudi Aramco (2222.SE) is planning a $7 billion investment in a South Korean subsidiary’s plant in the port city of Ulsan to produce more high-value petrochemicals , the company announced Thursday.

The project, named Shaheen, is the Saudi company’s biggest investment in the Asian nation to develop one of the world’s largest petrochemical steam crackers integrated into a refinery, Aramco said in a statement.

Saudi Aramco owns more than 63% of South Korean refiner S-Oil Corp (010950.KS).

Construction of the new plant will begin in 2023 and be completed by 2026. It will have a production capacity of up to 3.2 million tons per year, as well as a production facility for high-value polymers, said Aramco.

The steam cracker is expected to process crude processing by-products, including naphtha and off-gases, to make ethylene, and is also expected to produce propylene, butadiene and other base chemicals.

Upon project completion, S-Oil’s chemical yield, by volume, could nearly double to 25%, Aramco said.

Global petrochemical demand growth is expected to “accelerate, driven in part by rising consumption from emerging economies in Asia,” chief executive Amin Nasser said in the statement.

The project is well placed to meet growing demand from Asian industries, he added.

The news came alongside Saudi Crown Prince Mohammad bin Salman’s visit to South Korea on Thursday.

($1 = 1,332.8900 won)

Reporting by Joyce Lee; Editing by Christopher Cushing and Clarence Fernandez

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