Lotte shuts Daesan cracker after explosion: Update

Market: Petrochemicals
04/03/20

Adds declaration of force majeure in paragraph 1, comments in paragraphs 3 and 4

South Korea's Lotte Chemical has shut its 1.1mn t/yr ethylene cracker in Daesan after an explosion that has injured at least 31 people. It has also declared an indefinite force majeure on supplies.

The company declined to comment on when the cracker will restart following this outage.

"We cannot confirm when it will restart and [about ethylene sales] we are managing," said a spokesperson, adding that they anticipate the ethylene production loss to be substantial.

The cracker may be shut for a few months for the repair and government checks, said other Korean producers.

The explosion occurred from a fire at a compressor unit within the naphtha cracker around 3am South Korea time (18:00 GMT) on 4 March. The fire has now been extinguished and investigation is underway to assess the extent of damage.

The cracker complex also produces 550,000 t/yr of propylene and 190,000 t/yr of butadiene. The cracker also feeds an aromatics unit that can produce 240,000 t/yr of benzene, 120,000 t/yr of toluene and 60,000 t/yr of solvent grade mixed xylenes.

Other downstream facilities are also expected to be subsequently shut as feedstock from the cracker dries up. These are a 130,000t/yr of low-density polyethylene, 290,000t/yr of LLDPE, 500,000 t/yr of polypropylene, 730,000t/yr of ethylene glycol and 580,000t/yr of styrene monomer.

Lotte sells ethylene to local producers like Hanwha Total for downstream consumption. One of the smaller buyers said that they are not impacted that much as their cracker is still operating at full rates to cover the shortfall.

By Suzi Shin

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