Saudi Aramco has made a major leap towards expanding its international downstream portfolio by signing key deals with South Korean refiner S-Oil.

Aramco, which is the majority shareholder in S-Oil, launched two specialised units within the S-Oil-operated refinery complex in the South Korean city of Ulsan, which has an output capacity of 700,000 barrels a day (b/d).

The residue upgrading and olefin downstream plants will raise S-Oil’s specialty crude products output from 8 per cent to 13 per cent and introduce high-value products such as propylene and gasoline into the firm’s production mix.

Aramco has also committed $6bn for a petrochemicals complex it will build jointly with S-Oil by 2024. The project will feature a steam cracker and olefins producing unit.

The petrochemicals project will draw on feedstock of naptha and refinery off-gases from the Ulsan refining complex. It is estimated to produce 1.5 million tonnes a year (t/y) of ethylene, 500,000 t/y of propylene, various polyolefins categories and other types of basic chemicals.

A significant aspect of the Ulsan petrochemicals project is that it will use Aramco’s patented thermal crude-to-chemicals technology for the first time on a commercial basis.

The agreements with S-Oil are part of Aramco’s objective to boost total refining output from 5.4 million b/d to 8-10 million b/d from its domestic and international operations.