Korean builders hit jackpot with S-Oil's Shaheen project

Hyundai E&C CEO Yoon Young-joon, third from left, Korea Development Bank Chairman Kang Seog-hoon, fourth from left, and S-Oil CEO Hussain A. Al-Qahtani, fifth from left, cut rice cakes with participants at a groundbreaking ceremony for Shaheen project in Ulsan, Thursday. Courtesy of Hyundai E&C

By Park Jae-hyuk

Multiple domestic builders hit the jackpot thanks to S-Oil's 9.26 trillion won ($7 billion) “Shaheen” project aimed at building Korea's largest petrochemical plant in the southeastern port city of Ulsan by 2026, according to industry officials, Friday.

Hyundai E&C said in a regulatory filing that it signed a 2.4 trillion won contract with the oil refiner, which is owned by Saudi Arabia's Aramco, to construct a steam cracker and thermal crude-to-chemicals (TC2C) facility.

The construction arm of Hyundai Motor Group has led a consortium of local builders to participate in the mega-size project named after Saudi Arabia's national bird. Shaheen means falcon in Arabic.

“Our participation in the largest-ever project in the Korean petrochemical industry's history is the result of the recognition of our world-class technical skills in the construction of petrochemical and gas plants, as well as our excellent capabilities in engineering, procurement and construction (EPC),” a Hyundai E&C official said.

Hyundai Engineering, a subsidiary of Hyundai E&C, is also participating in the consortium to build the steam cracker and TC2C facility, as well as the construction of an automated warehouse and manufacturing facilities for high-density polyethylene and linear low-density polyethylene.

DL E&C, another participant in the consortium, said it signed a 1.4 trillion won contract with S-Oil for the steam cracker and TC2C facility.

“We will prove our ability through the nation's largest-ever petrochemical project,” a DL E&C official said. “We will make every effort to commercialize TC2C for the first time in the world.”

Lotte E&C is involved in the construction of the automated warehouse, as well as another project to build 21 tanks to store petrochemical products and materials, including liquefied petroleum gas (LPG), ethylene and propylene.

“We will do our best to successfully complete the project,” a Lotte E&C official said.

The CEOs of Hyundai E&C, DL E&C and Lotte E&C also attended Thursday's groundbreaking ceremony for the Shaheen project, along with senior-level government officials and S-Oil CEO Hussain A. Al-Qahtani, in order to celebrate Aramco's largest-ever investment in Korea.

During the groundbreaking ceremony, Aramco CEO Amin H. Nasser told President Yoon Suk Yeol that the Saudi state-run oil giant's board members will visit Ulsan during the weekend to be briefed on the project, according to the presidential office.

Aramco also hosted a banquet for its board members at Grand Hyatt Seoul on Thursday evening, inviting Korean ministers and business leaders.

According to industry officials, the guests included HD Hyundai President Chung Ki-sun, GS Caltex CEO Hur Sae-hong, Hyosung Vice Chairman Cho Hyun-sang, Minister of Land, Infrastructure and Transport Won Hee-ryong, Minister of Foreign Affairs Park Jin and Minister of Oceans and Fisheries Cho Seung-hwan.

The Korea Times asked Aramco Korea whether it can disclose additional itineraries of the board members in Korea, but the company refused to answer.