Total-Hanwha Joint-Venture to Invest for Expansion of South Korea Refinery

Hanwha Total Petrochemicals plant to invest USD450 million in South Korea Refinery

South Korea: Hanwha Total Petrochemicals Co., Ltd, which is a 50:50 joint venture between Total and Hanwha petrochemicals have planned to invest USD450 million for expansion of its Daesan refining platform in South Korea.

This investment is likely to increase the ethylene capacity of the site by 30 million tons per annum. The site holds a steam cracker, polymers and condensate splitter and generated USD1 billion revenue in 2016. The project clearly reflects Total’s strong partnership with Hanwha and its contribute in the growth of their refining & petrochemical cash flow.

The manufacturing site also depicts a strong hold for Total as the plastic demand in Asia is constantly increasing. The expansion is expected to be completed by the end of 2019.

TechSci Research depicts that the expansion would increase the flexibility of the site and would assist the joint venture to sell ethylene at competitive prices. Also, with this expansion the ethylene production will meet local supply and demand of the fast-growing Chinese ethylene market as they import a significant amount of ethylene.

According to a recent report published by TechSci Research, “Global Ethylene Market By End Use (Polyethylene (PE), Ethylene Oxide, Ethylene Dichloride (EDC) & Others), By Region (Asia-Pacific, North America, Middle East & Africa, Europe and South America), Competition Forecast and Opportunities, 2011 - 2025”, the global ethylene market is expected to grow at a CAGR of around 11.26% during 2016-2025, on the back of growing demands for flexible packaging materials, disposable items and expanding real estate & construction sector, globally. Increasing awareness among people about package labelling and its advantages, along with production of light weight automobiles and expanding infrastructure sector in developing countries is expected to result in augmented demand for ethylene and its derivatives. Additionally, lifting of sanctions on Iran and its entry to the global market with abundant crude oil reserves and low cost feedstock availability in conjugation with discovery of shale gas reserves in North America, is expected to lead to higher production capacity of ethylene, globally. Global ethylene market is controlled by three major players, namely – SABIC, The Dow Chemical Company and Exxon Mobil Corporation. Few other players operating in the global ethylene market are Sinopec Corporation, Lyondell Basell and Total S.A, France.