Saudi Crown Prince inaugurates $6bn S-Oil refinery expansion in South Korea

S-Oil’s Oil Refinery Complex (Credit to S-Oil)

Saudi Arabia’s Crown Prince Mohammad bin Salman will launch the $6bn expansion of the S-Oil refinery, the third-largest oil refinery in Korea and the wholly-owned by Saudi Aramco.

Aramco’s chief executive, Ameen Al-Nasser, said that the second phase of the refinery’s expansion would directly convert crude oil to chemicals.

Korea’s S-Oil signed an understanding memorandum with Saudi Aramco on technical advice for a petrochemical plant, S-Oil is seeking to build in South Korea.

S-Oil said that the petrochemical plant would cost about $6bn, up from about $4.3bn in previous estimates.

In last February, S-Oil signed a contract to sell a total of $2.61tn won ($2.32bn) of refined oil products to Saudi Aramco’s trading arm.

The company said that it would supply up to 17 million barrels of diesel, up to 13 million barrels of naphtha and up to 12 million barrels of jet fuel to Aramco Singapore under the contract between January 1st and December 31st, 2019.

In the same context, Aramco Overseas Company B.V. (AOC) previously purchased a 17 percent stake in “South Korea’s Hyundai Oilbank”, a subsidiary of Hyundai Heavy Industries Holdings (HHI Holdings), worth $1.25bn (SAR4.69bn). South Korea’s Hyundai Oilbank was established in 1964 and its main facilities are located at Daesan petrochemical complex, which houses an integrated refinery with a production capacity of 650,000 bpd.

Hyundai OilBank and its five subsidiaries include refining, base oil, petrochemicals, and a network of gas stations, the company said in a statement.

The investment of AOC, in South Korea’s Hyundai OilBank, is stepping up efforts to market its crude oil by adding a reliable outlet to market Arab crude oil to South Korea.

AOC is a subsidiary of Saudi Aramco and provides support services. Its joint ventures and investments form an integral part of the Saudi Aramco global crude oil, gas, and chemical system.