While much of the global petrochemical industry is struggling with overcapacity and weak margins, South Korea is making a remarkably bold industrial bet.
S-OIL is nearing completion of its Shaheen Project in Ulsan, representing an investment of approximately KRW 9.26 trillion ($6.4 billion) — the largest petrochemical investment in South Korean history. S-OIL is controlled by Saudi Aramco through its overseas subsidiary.
At the heart of Shaheen is one of the world’s largest steam crackers, designed to produce around 1.8 million tonnes of ethylene and 750,000 tonnes of propylene annually. The complex will also produce polyethylene and integrate refining much more closely with petrochemical production.
Perhaps most interesting is the first commercial deployment of Thermal Crude-to-Chemicals (TC2C) technology developed by Aramco and Lummus Technology. The process allows crude oil and refinery by-products to be converted more efficiently into petrochemical feedstocks, potentially reducing operating costs.
The timing is striking. Asian petrochemicals are under enormous pressure from Chinese capacity expansion.
South Korea’s answer is therefore not simply to retreat from petrochemicals. It is to replace yesterday’s industrial capacity with larger, more integrated and more competitive assets.
For Europe, currently debating plant closures and industrial decline, Shaheen offers an interesting comparison.