Total-Hanwha JV to invest $450 mn for expansion of South Korean refinery

The investment will increase the site's ethylene capacity by 30% to 1.4 million tonnes per annum

Hanwha Total Petrochemical’s Daesan facility in South Korea

Last Updated : Apr 12 2017 | 5:00 PM IST

Hanwha Total Petrochemical, a 50:50 joint venture between Hanwha and Total, will invest $450 million to expand its Daesan refining & petrochemicals integrated platform in South Korea. The planned investment will increase the site’s ethylene capacity by 30 percent to 1.4 million tonnes per annum.

Daesan is one of Total’s six world-class integrated platforms and a strategic asset for Hanwha. This site which is comprised of a highly flexible condensate splitter, a competitive steam cracker and polymers, styrene and aromatics units, generated a net result of nearly $ 1 billion in 2016.

The extension will significantly increase the site’s flexibility, enabling it to process competitively priced propane feedstock which is abundantly available, notably due to the shale gas revolution in the US. The expansion project is set to be completed by mid-2019.

The additional ethylene production will meet local demand and also supply the nearby fast-growing Chinese market which imports a significant part of its ethylene requirements.

“This project is part of our strategy to invest in world-class integrated platforms to develop petrochemicals based on competitive feedstock and targeting high-growth markets. The investment reflects the strong partnership with Hanwha and will contribute to the growth of our refining & petrochemicals cash flows,” said Bernard Pinatel, president refining & chemicals of Total.

The Daesan refining and petrochemicals platform in South Korea gives Total a strategic position in Asia. A nearly $2 billion upgrade, completed in late 2014, doubled the site’s production capacity to meet the strong growth in demand for plastics in Asia, notably in China.

In addition to oil products (kerosene, diesel, gasoline), the Daesan site also manufactures polypropylene, polyethylene, styrene, paraxylene and EVA (ethylene-vinyl acetate copolymer). All are essential components for manufacturing many everyday products.

The Daesan site also supplies styrene to Total’s Foshan petrochemical plant in China, which produces more than 200,000 tonnes of polystyrene annually.