KOREA (SOUTH): S-Oil completes world's largest PX plant

The Korean oil refiner, headed by CEO Ahmed Subaey, held a ceremony Thursday (20 Oct 2011) for the completion of the paraxylene (PX) production facilities at its factory in Onsan, Ulsan, North Gyeongsang Province, where President Lee Myung-bak and Ali Al-Naimi, the Saudi Arabian minister of petroleum and mineral resources, were present.

Under the title of the Onsan Refinery Expansion Project, S-OIL invested 1.3 trillion won as part of its efforts to secure future growth engines and broke ground for the expansion on 11 June 2009.

The completion of the plant, also known as the No. 2 Aromatic Complex, enables S-Oil to annually produce 1.7 million tons of PX, the largest among single plants in the world and 560,000 tons of benzene. This almost doubles the refiner's original production capacity, catapulting the company to one of the most competitive suppliers of petrochemical products globally.

"Through the expansion of the PX plant, I expects further growth for the Korean oil refining sector from an ‘industry that refines imported crude oil' into an ‘industry that produces and exports high value added petroleum products,'” President Lee said in his congratulatory speech.

"The relationship between S-Oil and Saudi Aramco provides a successful model of economic cooperation and symbolizes friendship between Korea and Saudi Arabia.” Saudi Aramco is the largest shareholder of S-Oil.

Al-Naimi said: "The cooperation between S-Oil and Saudi Aramco is seen as the most ideal model of economic cooperation between an oil producing country and an oil consuming country. It is known as the most successful case out of the many projects that Saudi Arabia has undertaken around the world.

"Korea's know-how on economic development, sophisticated technology, people's confidence and hard-working spirit are something to learn from. I truly hope that today's inauguration becomes yet another turning point for the two countries to emerge as new strategic partners.”

Subaey said, "The new facilities are the starting line for S-Oil's new future, not final destination, and we will expand our business territory to petrochemical downstream and further to solar energy business of manufacturing polysilicon.”

S-OIL is expected to witness an increase in profitability generated from the expansion project.

By selling products from the new plant to overseas markets, S-Oil expects to add another $2 billion to its export revenue per year.

"Supply volume will not increase in the next couple of months because it was only very recently that other companies announced PX plant projects. In addition, the demand for PX in Asia will see a huge growth, largely driven by polyester industry expansion in China. As the most influential PX supplier in the Asia Pacific region, we will take full advantage of being geographically adjacent to the global center of demand to become the most competitive supplier,” said an official of the oil refiner.

Source: Daily "The Korea Times", Seoul; 21 Oct 2011

(Syed Rashid Ali, Karachi, Pakistan)