"Lotte Chem Invests 140 Billion Won in Facility Efficiency to Produce Plastic Raw Materials from LPG"

Lotte Chemical Yeosu Plant. Photo by Lotte Chemical

[Asia Economy Reporter Choi Dae-yeol] Lotte Chemical announced on the 5th that it plans to increase the proportion of liquefied petroleum gas (LPG) used as a raw material in the ethylene production process to around 40% by next year. Currently, naphtha is mainly used, but the company expects that LPG, which has higher price competitiveness and allows flexible response according to raw material market conditions, will improve process efficiency.

Following this decision, the company will invest 140 billion KRW to improve the efficiency of raw material facilities at the Yeosu and Daesan naphtha cracking (NC) plants. Currently, the proportion of LPG used as a raw material in the company's domestic ethylene plants is about 20%, but it will double by the end of next year. Going forward, the company plans to diversify raw materials up to a maximum of half, depending on ethylene production capacity.

Ethylene is a basic product of the petrochemical industry and is used to make various products such as plastics and synthetic rubber. When measuring the scale of petrochemical plant facilities, ethylene production capacity is mainly used and is called the "rice" of the petrochemical industry. Most ethylene is produced using naphtha as the main raw material, but recently, due to rapid oil price fluctuations and emission issues, cases of replacing it with LPG are increasing.

Lotte Chemical completed preliminary construction work during a minor maintenance at the Daesan plant starting in May. In addition to LPG facilities, the company also carried out additional construction to reduce air pollution emissions, paying close attention to emission reduction, the company said. Hwang Jin-gu, head of Lotte Chemical's Basic Materials Business, said, "It is important to carry out competitive facility investments in a timely manner in line with the changing business environment," adding, "We will continue concrete actions from the ESG (Environmental, Social, and Governance) management perspective, such as switching to low-carbon raw materials and reducing carbon emissions."