Hanwha Total Petrochemical, a 50/50 joint venture between Total and Hanwha, will invest nearly $500 million to further expand its Daesan integrated refining and petrochemical complex in South Korea, Total announced on Monday.
The planned investment will increase polypropylene capacity by close to 60 percent to 1.1 million tonnes per year by the end of 2020.
This project also complements the ongoing investments totaling $750 million to increase the complex's ethylene production capacity by 30 percent to 1.4 million tonnes per year by mid-2019 and to expand polyethylene production capacity by 50 percent to 1.1 million tonnes by the end of 2019.
"All these investments are designed to take advantage of competitively priced propane feedstock, which is abundantly available due to the shale gas revolution in the U.S. With this new investment, Daesan will be in a position to capture margins across the propylene-polypropylene value chain, as it already does in the ethylene-polyethylene value chain," Total said.
The company added the additional production of high-value-added polymers would allow the complex to meet local demand and supply the fast-growing Asian market.
"This new investment in Daesan is fully in line with our strategy of growth in petrochemicals to meet global demand, focusing investments on our world-class facilities and leveraging competitively priced feedstock.
This polypropylene project complements our offering of high-value-added polymers to the fast-growing Asian market," said Bernard Pinatel, president, Refining and Chemicals at Total.
He added that, "Daesan is one of Total's six world-class integrated complexes and a strategic asset for both shareholders."
It comprises a flexible condensate splitter, a competitive steam cracker and units producing polymers, styrene and aromatics.
The Hanwha Group, founded in 1952, is a global company operating in a broad range of businesses spanning the spectrum of manufacturing, construction, finance, services and leisure industries.
The Group consists of 56 domestic affiliates and 226 global networks, as of June 2016.
By Murat Temizer