Saudi Aramco advances global chemicals strategy with S-Oil deal

Saudi Aramco and S-Oil have signed a memorandum of understanding (MoU) to collaborate on a $6bn steam cracker and olefin downstream project in Ulsan, South Korea, which is expected to be completed by 2024. The agreement includes the use of Saudi Aramco’s thermal crude-to-chemicals (TCTC) technology.

The new world class steam cracker is expected to produce 1.5mn t/y of ethylene and 500,000 t/y of propylene, and will be primarily integrated with polyolefins (HDPE, LLDPE and PP). The facility will be able to process feedstocks ranging from refinery off-gas to naphtha, sourced from S-Oil’s existing 669,000 b/d refinery. The adoption of the TCTC technology is expected to provide another source of feedstock to the cracker.

TCTC is a two-step process. The first step is a crude pre-treatment process, which includes treatment to remove contaminants and to tailor a feedstock stream suitable for steam cracking. Step two comprises conventional steam cracking feeding the treated stream for the production of ethylene, propylene etc.

The agreement supports Saudi Aramco’s plan to increase its global petrochemicals footprint over the next decade. Aramco Overseas Company is a major shareholder in S-Oil, which is South Korea’s third-largest refiner.

Saudi Aramco and its affiliates have also signed 12 agreements with other major South Korean companies to reinforce relationships with South Korea, expand international operations, and support the region’s energy security with the expansion of Arabian crude oil supply to Asian markets.

The deals include crude oil sales agreements under which Saudi Aramco and affiliates will supply Arabian and non-Arabian crude oil to Hyundai Oilbank. An MoU was signed between Saudi Aramco and Hyundai Motor Company that will create a strategic collaboration to accelerate the expansion of the hydrogen ecosystem in the Saudi Arabian and South Korean markets, and to explore the use of advanced non-metallic materials in various fields including the automotive industry. Saudi Aramco also signed an MoU with Korea National Oil Corporation that will allow Saudi Aramco to explore the potential of crude oil storage in South Korea to complement its marketing and supply activities.