Korea's SKGC to idle small cracker at Ulsan

South Korean petrochemical producer SKGC is planning to idle its small cracker in Ulsan from December this year after the plant struggled to stay competitive.

"Despite our stable operation and improvement efforts, the facility has continuously suffered from a decline in competitiveness," SKGC said.

The decision was made before the coronavirus outbreak and the recent collapse in energy futures, a market participant close to the company said.

The naphtha-fed cracker can produce 190,000 t/yr of ethylene, which is currently being used for downstream production at polyethylene (PE) units at the same location.

SKGC produces a total of 430,000 t/yr of linear low-density/high-density PE (LLDPE-HDPE) from two lines in Ulsan, as well as another 190,000 t/yr of HDPE from the same location.

It also operates a second, larger cracker at Ulsan that produces 680,000 t/yr of ethylene. This cracker will continue to operate at stable rates.

South Korea has focused on petrochemical investments to support its export-reliant economy in recent years.

Fellow Korean producer S-Oil last year completed a residue-upgrading and olefin-downstream complex, and plans to build a steam cracker and olefins facility by 2022.

Hyundai Chemical is also scheduled to increase its polymer capacity by 1.15mn t/yr by 2022.

By Mahua Chakravarty, Muhamad Fadhil and Suzi Shin

source: Argus Media