Saudi Aramco (2222.SE) plans a $7-billion investment at a South Korean affiliate's factory in the port city of Ulsan to turn out more high-value petrochemical products, the company said on Thursday.

The project, named Shaheen, is the Saudi firm's biggest investment in the Asian nation to develop one of the world's largest refinery-integrated petrochemical steam crackers, Aramco said in a statement.

Saudi Aramco owns more than 63% of South Korean refiner S-Oil Corp (010950.KS).

Construction of the new plant will begin in 2023 and be completed by 2026. It will have production capacity of up to 3.2 million tonnes a year, along with a facility to produce high-value polymers, Aramco said.

The steam cracker is expected to process by-products from crude processing, including naphtha and off-gas, to make ethylene, and is also expected to produce propylene, butadiene and other basic chemicals.

On completion of the project, S-Oil's chemical yield, by volume, could almost double to 25%, Aramco said.

Global petrochemical demand growth is "anticipated to accelerate, driven in part by rising consumption from Asia’s emerging economies," Chief Executive Amin Nasser said in the statement.

The project is well positioned to meet rising demand from Asia's industries, he added.

The news came in conjunction with Saudi Arabian Crown Prince Mohammed bin Salman's visit to South Korea on Thursday.

($1=1,332.8900 won)

Reuters