S-Oil, the nation’s third-largest oil refiner, broke ground for its much-awaited residue upgrading complex and olefin downstream complex, the company announced Friday.

This is the oil refiner’s first massive investment project since Saudi Aramco, the world’s largest oil exporter, became its largest shareholder by purchasing additional shares last year. The project worth 4.8 trillion won ($4 billion) is also the largest plant construction project in the nation.

“Through this project, we expect to contribute to the regional economy, by creating around 20,000 jobs and raising export volume by 2.5 trillion won annually,” said Nasser Al-Mahasher, chief executive of S-Oil, at the groundbreaking ceremony of the plant located in Ulsan, southeast of South Korea.

The project, to be completed by April 2018, includes a residue-upgrading complex, which daily converts 76,000 barrels of residues to high-valued products such as propylene -- mainly used for industrial plastic -- and gasoline. It processes cheap residues left after extracting gas and light oil from crude oil.

This is seen by industry watchers to save cost as the company is able to produce more high-valued products with the same amount of crude oil.

The project in Ulsan also includes an olefin downstream complex, which produces 405,000 tons of polypropylene and 300,000 tons of oxide polypropylene, the company said. Oxide polypropylene is mainly used for interior materials of vehicles, electronic products and insulators.

“We plan to diversify our business portfolio from conventional oil refining to petrochemical business, with the aim of growing the new business into our future growth engine,” the company’s spokesperson told The Korea Herald.

By Shin Ji-hye (shinjh@heraldcorp.com)