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S-Oil to invest about $5 billion in world-scale cracker, downstream facilities

August 22, 2018
Chemical Value Chain

S-Oil (Seoul, South Korea), a large producer of aromatics majority-owned by Saudi Aramco, announced on Wednesday that it is carrying out a feasibility study to build a mixed-feed cracker with a capacity of 1.5 million metric tons/year (MMt/y) as well as downstream petrochemical units. The project, which will require an investment of more than 5 trillion South Korean won ($4.46 billion), forms part of S-Oil’s phase-two investment to expand its petrochemical business. It aims to complete the investment by 2023.

The steam cracker will produce ethylene and other basic petrochemicals from naphtha and off-gas that is currently burned as fuel in the company’s refinery, giving S-Oil an added advantage in feedstock sourcing and cost competitiveness, the company says. S-Oil plans to make several downstream products including polyethylene (PE) and polypropylene (PP).

The new facilities will be built on a 400,000-square-meter site that S-Oil purchased from Hyundai Heavy Industries near S-Oil’s Ulsan, South Korea, refinery to create a large single-location complex and secure higher economics and operational efficiency. The company’s refinery, with a capacity of 669,000 b/d, is one of the largest in the world.

The phase-two project will serve as a new growth engine for the company by diversifying its portfolio, sharpening competitiveness, and building a more stable income structure, the company says. S-Oil is confident that the project will put the company in a better position to navigate through the rapid changes in the business environment brought on by shale oil and electric vehicles, and other trends.

S-Oil recently invested in a residue upgrading and an olefins production complex at Ulsan, under its phase-one diversification program into petchems. It included a methyl tert-butyl ether plant, an alkylation facility, and a gasoline plant. S-Oil’s residue fluid catalytic converter produces propylene, which is being processed into PP and propylene oxide. The company is a major producer of para-xylene with a capacity of 1.85 MMt/y.

By Natasha Alperowicz

Source: Chemical Week

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