S-Oil's construction site of the Shaheen project in Onsan plant in Ulsan (S-Oil)

ULSAN -- The construction site of S-Oil’s Shaheen project at its Onsan plant in Ulsan showed little to no activity Tuesday afternoon. Although the day’s workflow had seemingly stopped due to heavy downpours in the morning, the officials from S-Oil and Hyundai Engineering & Construction said the building process of the Shaheen project had already reached 40 percent completion.

“Four major construction firms -- Hyundai E&C, Hyundai Engineering, Lotte E&C and DL E&C -- are building (the Shaheen project) together as a consortium,” Lee Hyun-young, control director of Hyundai E&C’s Shaheen project team, told a group of reporters at a high-level observatory site that offered an aerial view of the construction area.

“We are on pace to complete the mechanical construction in June 2026 and will begin test operation then.”

After S-Oil and the consortium broke ground for the Shaheen project, the country’s single largest petrochemical project worth 9.26 trillion won ($6.7 billion), in March last year, the involved parties have been on a smooth track to bolster the oil refiner’s next growth engine by setting up a steam cracker, thermal-crude-to-chemicals, or TC2C, facilities, a polymer plant and storage tanks.

S-Oil, which is 63.4 percent owned by the world’s largest oil producer, Saudi Arabia’s Aramco, highlighted that the TC2C technology developed by Saudi Aramco will debut its first commercial production at the Shaheen project upon the start of mass production.

The new TC2C facility, which will directly convert crude oil petrochemical feedstock such as liquefied petrochemical gas and naphtha, and the polymer plant, which will produce petrochemical feedstock for plastics and other synthetic resins, are expected to diversify S-Oil’s fuel-heavy business portfolio.

“Once the Shaheen project is completed and begins mass production, we will be able to more than double the portion of the petrochemical production from the current 12 percent to 25 percent,” said Park Sung-hoon, head of S-Oil’s refinery services division.

As the oil refiner continues to ramp up measures to cut carbon emissions to reach net zero by 2050, the Shaheen project looks to add more to the company's eco-friendly efforts. According to S-Oil, the steam cracker -- the world's largest single steam cracker with 10 cracking heaters standing at 67 meters tall -- plans to secure energy efficiency by implementing a self-power-generation structure through a gas turbine power generator and recycling heat waste for the steam cracker's heat source.

S-Oil underscored that the company came up with measures to reduce carbon emissions by 20 percent from the initial design of the Shaheen project, adding that its efforts towards net zero will ultimately bring a positive impact on the oil and petrochemical industry.

Pointing to the modules installed for the steam cracker at the construction site, the officials from S-Oil and Hyundai E&C underlined the Shaheen project’s effect on the region’s employment and economy.

“There are about 4,200 workers per day at the construction site right now,” they said.

“We expect that figure to increase to 14,000 in the third quarter of next year when we will be at the peak of the construction process. If we include the number of people who will be involved from the outside of the construction site, the total figure will be around 17,000.”

According to the Ulsan Metropolitan City, the area’s average floating population per month increased to 123,000 in Dec. 2023, a notable increase from the same index of 103,000 people in 2021.

Once the Shaheen project begins operation on a full scale, it is expected to create 400 jobs and approximately 3 trillion won in economic value.