Sinopec-SK’s new petrochemical plant to start full operation
Sinopec-SK Petrochemical Co., Ltd., a joint venture of SK Global Chemical (a subsidiary of SK Innovation) and Sinopec, which is the largest petrochemical company in China, plans to complete its expansion of new petrochemical facilities and start commercial operations in the second half of 2021.
In October 2017, Sinopec-SK Petrochemical announced an additional investment plan valued at KRW740 billion (USD657.4 million) to expand petrochemical facilities for 300,000 tons of ethylene, 300,000 tons of polyethylene, 300,000 tons of polypropylene, and 60,000 tons of butadiene. This investment money came from the revenues that Sinopec-SK Petrochemical had raised independently.
The company completed the extension of ethylene production facilities in December 2020, and successfully carried out their initial operations. These facilities are maintaining an operating ratio of around 90%. Polypropylene and butadiene facilities were completed in March and are operational. In particular, Sinopec-SK Petrochemical plans to produce high quality, high value-added High Crystalline Polypropylene (HCPP) with improved strength from the new polypropylene facility expansion. The expansion of the polyethylene facility will be completed by June, and will be operational from the second half of 2021.
When the expansion of petrochemical production facilities is completed in the second half of 2021, Sinopec-SK Petrochemical will reach an annual production capacity of 3 million tons of petrochemical products, including 1.1 million tons of ethylene, 0.9 million tons of polyethylene, 0.3 million tons polypropylene, and 0.19 million tons of butadiene. This represents an approximately 40% increase from the previous 2.2 million tons of petrochemical production capacity.
Ethylene and propylene are also known as the “grains of the petrochemical industry” because of their broad utilization in home appliances, clothing and car interior materials. The global market for ethylene has shown a steady growth of more than 4% per year on average from 2016 to 2020.
The petrochemical industry anticipates that this expansion will benefit Sinopec-SK Petrochemical in the chemical products market for ethylene and propylene.
Recently, ethylene markets have shown an upturn in prices, boosted by the expectation of a global economic recovery post-Covid 19 and the supply shortages caused by the stoppage of massive petrochemical facilities in Texas in February.