South Korea’s Lotte Chemical is working to diversify raw materials to maximize the cost competitiveness of its petrochemical plants.
The company has built a heavy feed petrochemical complex (HPC) in a joint with Hyundai Oilbank. The complex uses heavy oil as its main ingredient and will begin test operations in September before starting commercial production at the end of 2021.
Lotte Chemical’s HPC is expected to boast the highest cost competitiveness in Northeast Asia as it minimizes the use of naphtha and instead uses oil refinery byproducts such as desulfurized heavy oil, by-product gas, and liquefied petroleum gas (LPG).
Other than that, Lotte Chemical is also utilizing shale gas and LPG as raw materials producing ethylene through an ethane cracker center (ECC), which uses shale gas-based ethane. ECCs have higher cost competitiveness than NCCs.
The company will increase the consumption of LPG at its ethylene production facilities in Korea from the current 20% to about 40% by the end of 2022, and up to 50% in the future.
In the second quarter of this year, Lotte Chemical's U.S. subsidiary (LC USA) recorded an operating profit ratio of 30%. Its subsidiary in Uzbekistan also produces ethylene using locally produced natural gas.
Lotte Chemical also expand the use of LPG instead of naphtha for ethylene production at its plants in Yeosu and Daesan.
