Saudi Aramco, the world's largest crude oil exporter, will build a $7 billion refinery integrated petrochemical steam cracking unit in South Korea through its S-Oil department. Saudi Aramco said that the steam cracking unit converts crude oil into petrochemical raw materials, which is expected to produce up to 3.2 million tons of petrochemical products annually, and includes a facility to produce high-value polymers.

The global petrochemical landscape is developing rapidly, and demand growth is expected to accelerate, partly because of the increase in consumption in emerging Asian economies, said Amin Nasser, CEO of Saudi Aramco. The company said that the plant is expected to be completed in 2026, representing the first commercial use of thermal crude oil to chemicals technology by Saudi Aramco and Lummus Technology, which can increase chemical production and reduce operating costs.

Saudi Arabia and South Korea signed 26 investment agreements worth about US $30 billion, covering energy, industry and manufacturing, transportation, financial services, information and communication technology, chemical industry, environmental services, food processing and pharmaceutical industries. Although we are proud of our historical ties, we are now shifting our focus to the next 60 years of our partnership and beyond, Saudi Investment Minister Khalid Al Falih said in a statement.

This transaction coincides with the visit of Saudi Crown Prince Mohammed bin Salman to South Korea. The Crown Prince held formal talks with Prime Minister Han Yazhu in Seoul. During the meeting, they reviewed the friendly relations between the two countries, the prospects of bilateral cooperation and the ways to develop and strengthen bilateral cooperation in various fields. Compared with the same period in 2021, the bilateral trade between Saudi Arabia and the Republic of Korea jumped 66% in the third quarter of 2021, reaching US $7 billion. In January 2022, Saudi Aramco signed 10 agreements with Korean enterprises, covering manufacturing, low-carbon energy development and finance.

The newly announced steam cracking unit will process by-products of crude oil processing, including naphtha and waste gas, to produce ethylene, a petrochemical product used to manufacture thousands of daily necessities. The plant is also expected to produce propylene, butadiene and other basic chemicals. With more and more consumers turning to electric vehicles, it is expected that the petrochemical industry will become the main driving force of crude oil demand in the coming decades.

According to the data of the International Energy Agency, petrochemical products will account for more than one third of the increase in oil demand by 2030 and nearly half of the increase in oil demand by 2050, ahead of trucks, aviation and shipping. The agency said that by 2030, petrochemical products will consume an additional 56 billion cubic meters of natural gas, equivalent to about half of Canada's current total natural gas consumption. In March 2022, Saudi Aramco said that its joint venture in China would develop a large integrated refining and petrochemical complex in northeast China. The new Greenland project will have a refining capacity of 300000 barrels a day and petrochemical units, which are expected to start operation in 2024.

According to data from Precedence Research, the value of the global petrochemical market is expected to increase from about 475 billion dollars in 2020 to about 800 billion dollars by 2030. Shaheen of S-Oil is in a favorable position to meet the growing demand for materials from major industries in the region, Mr. Nasser said. Saudi Aramco said that the plant will use mixed raw materials, which is superior to the naphtha cracking unit in terms of overall efficiency and performance. Saudi Aramco is the major shareholder of S-Oil, holding more than 63% of the company's shares through another subsidiary.Editor/Xing Wentao