S-Oil, South Korea’s No.3 oil refiner by capacity, said it had signed a memorandum of understanding with its top shareholder, Saudi Aramco, for technical advice on a multi-billion dollar petrochemical plant it is looking to build.
S-Oil said in a statement on Wednesday that the cost of the proposed project in the southeast of South Korea was estimated at 6 billion dollars, up from the 4.3 billion dollars it had previously expected.
The MOU coincides with Saudi Crown Prince Mohammed bin Salman’s visit to South Korea this week as the two countries seek to bolster economic ties.
Saudi Aramco said in a separate statement on Wednesday that it had signed 12 pacts with South Korean partners worth billions of dollars.
S-Oil said it hoped to complete the plant by 2024 as part of a drive to expand its petrochemical business.
The South Korean refiner said it was looking to build a so-called steam cracker with a capacity of 1.5 million tonnes per annum and olefin downstream facilities in the plant.
The cracker would produce ethylene and other basic petrochemical products, while the olefin downstream facilities would churn out high-value petrochemical products including polyethylene.
S-Oil said last August that it was conducting a feasibility study into building the cracker and olefin downstream facilities.
Separately, S-Oil last year finished building two other petrochemical plants in South Korea.
They began operating in November, producing 405,000 tonnes per year of polypropylene, 300,000 tonnes per year of propylene oxide, and 21,000 barrels per day (bpd) of gasoline.