South Korea’s SKC partners Kuwait's PIC

The SKC affiliate of South Korea's SK Group conglomerate agreed yesterday to hive off its chemicals division and sell a 49pc stake to Kuwaiti state-owned KPC's Petrochemical Industries (PIC) unit.

The companies will turn the spun-off business into a joint venture between SKC and PIC, aiming for next year's first quarter. The price PIC paid was undisclosed, but SKC said the companies value the venture at 1.45 trillion won ($1.2bn), putting the 49pc stake worth about $588mn.

The business includes SKC's production of propylene oxide (PO) and propylene glycol, as well as its 45pc interest in the SKC Evonik Peroxide Korea joint venture with Germany's Evonik, which makes hydrogen peroxide.

SKC said that partnering PIC will help it achieve its goal of boosting PO output to 1mn t/yr by 2025. The company has operated its PO manufacturing operation at a 100pc utilization rate for more than a decade, since commercializing an environmentally friendly method of oxidizing hydrogen peroxide to make PO.

The joint venture fits with PIC's 2040 strategy of diversifying sources of income for its parent, adding value to Kuwait's natural resources and pushing more of its weighting downstream to specialty products from basic petrochemicals. PIC said it sees the tie-up creating more downstream development opportunities.

KPC already holds a 35.1pc stake in Vietnam's 200,000 b/d Nghi Son refinery. PIC's Kuwait Vietnam Petrochemicals unit distributes 75pc of the polypropylene (PP) output from Nghi Son and imports and exports PP, polyethylene, paraxylene and styrene monomer.

SK Group and KPC's previous partnerships include the SK Advanced venture between SK Gas, PIC and Saudi Advanced Petrochemical, which built a 600,000 t/yr propane dehydrogenation plant in South Korea's Ulsan.

source: Argus Media