Saudi Aramco broke ground on the $7 billion Shaheen petrochemical project in Ulsan, South Korea, on Thursday, the oil giant said in a statement.

South Korean President Yoon and Saudi Aramco President and CEO Amin H Nasser attended the groundbreaking ceremony.

The Shaheen project, announced in November 2022, is being developed by Aramco affiliate S-OIL and is a key part of Aramco’s regional crude-to-chemicals strategy.

“Shaheen is among Aramco’s biggest international downstream investments, representing a significant and sizeable step forward in our liquids-to-chemicals expansion and another major milestone in further strengthening our presence in Korea,” Nasser said in the statement.

In November 2022 , Aramco said that the Shaheen project aims to convert crude oil into petrochemical feedstock and would represent the first commercialisation of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology, which increases chemical yield and reduces operating costs. 

The company invested $4 billion in the first phase of the petrochemical expansion, completed in 2018.

Located at S-Oil’s existing site in Ulsan, the new plant will likely produce up to 3.2 million tonnes of petrochemicals annually and include a facility to produce high-value polymers. The project is expected to be completed by 2026.

Aramco holds more than 63 percent of S-OIL’s shares through its Aramco Overseas Company subsidiary.

(Writing by D Madhura; Editing by Anoop Menon)