S-Oil lets contracts for Onsan refinery, olefins projects

S-Oil Corp., Seoul, has let a series of contracts to Axens to supply technology for a residue upgrading and capacity expansion project at its 669,000-b/d Onsan refinery complex in Ulsan, South Korea.

As part of the contracts, Axens will provide technology licenses, basic engineering, catalysts, adsorbents, and proprietary equipment for S-Oil’s residue upgrading complex project (RCUP), which aims to equip the refinery to reduce its production of fuel oil and maximize production of polymer-grade propylene through conversion of atmospheric residue, Axens said.

Axens scope of delivery for RCUP includes the following proprietary technologies:

• A Hyvahl atmospheric residue desulfurization unit for the production of diesel and improvement of residue quality. The Hyvahl unit includes a permutable reactor system, which protects the downstream catalysts by removing or converting a sizeable portion of sediment, metals, and asphaltenes from the feed.

• A high-severity fluidized catalytic cracking (HS-FCC) unit for the conversion of hydrotreated residue produced by the Hyvahl unit. Developed by an alliance of Saudi Aramco, JX Nippon Oil & Energy Corp., King Fahd University of Petroleum and Minerals, HS-FCC technology enables higher production yields of propylene than that produced by traditional FCC units through combined use of high reaction temperatures, a novel down-flow reactor concept, short contact times, and high catalyst-to-oil ratio.

• A Sulfrex unsaturated LPG extractive sweetening unit for the treatment of the LPG cut originating from the HS-FCC unit upstream of the polymer-grade propylene recovery process.

The result of a conceptual study conducted by Axens’ performance business program unit, S-Oil’s RCUP scheme will be the world’s first full commercial use of a unit featuring the Axens and Technip Stone & Webster-licensed HS-FCC technology, which alongside increased propylene, also has boosted production of other light, valuable byproducts (e.g., butenes, gasoline, and aromatics) at a semi-commercial HS-FCC plant commissioned in 2011 at JX Nippon Oil & Energy’s Mizushima refinery in Okayama Prefecture, Japan, according to Axens.

In addition to technology for RCUP, S-Oil also contracted Axens to provide the following proprietary technologies as part of the Onsan refinery upgrade:

• A Prime-G+ selective desulfurization unit for the treatment of HS-FCC gasoline production.

• A C4-stream processing section, will include a C4 selective hydrogenation unit, an MTBE unit, a super-fractionator, and a butane isomerization unit. This section will produce MTBE and 1-butene for use as a co-monomer in polymerization applications, as well as isobutane for use as feedstock to an alkylation unit.Values for the technology supply contracts were not disclosed.

S-Oil previously let a contract to Foster Wheeler AG to provide front-end engineering and design for RCUP (OGJ Online, Mar. 12, 2014).

Planned industrial complex

These latest technology contracts to Axens for RCUP follow S-Oil’s contract award to a consortium of South Korea’s Daelim Industrial Co. Ltd. and Daewoo Engineering & Construction Co. to build S-Oil’s Onsan Industrial Complex (OIC), which will include construction of RCUP as well as an olefins production complex, according to a May 20 release from Daelim.

Construction on OIC, which is S-Oil’s first large-scale investment project since Saudi Aramco subsidiary Aramco Overseas Co. BV took over majority ownership of the firm, is scheduled  to be completed during first-half 2018, the service company said.

While S-Oil has yet to disclose a final investment amount for the RCUP and olefins complex projects, Daelim estimated overall construction costs for the two projects at about 4.5 trillion won ($4.1 billion).

Once completed, the two projects, which are to be constructed simultaneously, will act as an integrated complex, where RCUP will supply its production as feedstock to the downstream olefins plant to provide S-Oil a competitive entry into the olefins business, S-Oil said.

S-Oil previously envisaged mechanical completion of the residue upgrading-olefins integrated project by end-2017, according to the company’s web site.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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